“Future of Downtown San Jose” – SV Business Journal Event
At a sellout breakfast summit hosted by the Silicon Valley Business Journal, developers, property owners and City officials shared their views on the future of Downtown. Mayor Sam Liccardo gave the keynote speech highlighting just how far Downtown has come over the past 15 years. He noted that the City’s improvements to public safety, engagement with major property owners, and supporting a more involved and opportunity-rich resident community have contributed to firm foundations for future growth.
He emphasized that the scale and range of new commercial and residential development represented a generational opportunity not just for San Jose but for the whole region. The Mayor underlined the City’s role in attracting and securing major investment in key sites, and explained that upgrades to our transportation infrastructure and ensuring a vibrant, people-centered environment are the key ingredients for San Jose. The Mayor acknowledged the importance of including affordable housing and the need for creative solutions.
He recognized that the very high cost of putting ‘shovels into the ground’ and controlling construction costs had contributed to increased business risk for developers. He focused on the importance of taking a long-term view and monitoring the impact of Adobe, Google and others on growth, along with a significant transportation infrastructure investment as drivers of demand for new business tenants.
To a loud round of applause, the Mayor introduced a City-wide review of the current multiple fee policy. Instead of the ‘ping-pong’ of piecemeal development fees, he outlined an ambitious goal – designing a single calculation driven by the principles of transparency and efficiency. The total fee applied would be the same as before, but by showing the total sum everyone would have certainty at the outset and the change will help speed transactional processing.
Following the Mayor’s keynote, a panel of leading land owners and property experts weighed in on the future of Downtown.
- Gary Dillabough – currently renovating the iconic Bank of Italy building
- Scott Ekman – leading the new fourth tower development at Adobe
- Chris Friese of Lift Partners
- Anne Ralston – senior managing director of Newmark Knight Frank Downtown
Scott Ekman indicated that Adobe will break ground later this year with a three-year build timeline. Theirrevised design will adds more than 4,000 Adobeworkers to Downtown. In response to a question, he did not favor ‘free food’ for staff, explaining that it was wasteful and he wanted to encourage more food retail options closer to Adobe. Adobe was the first major tech company to commit to a campus in Downtown, more than 20 years ago.
Chris Friese emphasized the nature of risk and the importance of setting high standards. He advocated pushing the envelope in terms of design and end-use occupation, even if that means accepting lower rents or shorter lease periods. Choosing the right tenant sends a powerful message for other developers and the City. San Jose has the scale and capacity to expand, unlike most other parts of Silicon Valley.
Anne Ralston emphasized the need to have both a multi-tenant and single-tenant property portfolio mix. A critical mass was being achieved with 180 tech firms now in downtown. She saw the potential for upgrading the existing office and commercial space allied to an expanding residential offer.
Overall sense of the event was that the growth of San Jose’s airport, the planned BART extension and the reengineering of Diridon station as a multi-modal transportation center will drive the economic growth of Downtown.