Google, San Jose could reach downtown property price deals for transit village by year’s end, mayor says

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Aerial view of the area of Google’s proposed transit-oriented village near the Diridon Station, on the western edges of downtown San Jose, California on Saturday, November 11, 2017. The proposed village would replace a hodgepodge of aging industrial, retail, dining, office and residential structures, along with vacant parcels and parking lots. (LiPo Ching/Bay Area News Group)

SAN JOSE — Google and San Jose may agree by year’s end on prices for government properties that would provide large chunks of downtown land for a proposed Google village.

Government officials, including from the city, are in talks with Google about selling the tech titan 16 government-owned properties that would be part of a transit-oriented Google village planned for the western edges of downtown San Jose. The complex discussions are making progress, San Jose Mayor Sam Liccardo recently told this news organization.

“We expect to get the basic terms of the agreement, the prices, worked out by the end of the year,” Liccardo said.

Formal agreements that could be submitted for final approval to the San Jose City Council aren’t anticipated until sometime next year, however.

Mountain View-based Google is planning its village near the Diridon train station. It would consist of 6 million to 8 million square feet of offices that could accommodate 15,000 to 20,000 Google workers.

Complicating the talks: A dozen or so tax-imposing entities are involved in the 16 parcels that are up for negotiation.

“These include the city, the county, along with school and water districts, and others,” said Richard Keit, managing director of the government agency that has replaced the defunct San Jose Redevelopment Agency.

Google and its development ally Trammell Crow have spent $148.9 million buying at least 22 different parcels, primarily along Montgomery, Autumn, Cinnabar and West San Carlos streets in the neighborhoods near Diridon Station and the SAP entertainment complex. The property purchases began in December 2016.

Since late June, however, Google and Trammell Crow have focused many purchases toward the southern end of Google’s areas of interest in downtown San Jose. Between completed purchases and properties in the city sales negotiations, Google is poised to cobble together a significant stretch of contiguous land south of the train station. That could make it possible for Google to begin construction in the southern portion of its purchased properties.

Asked if it was possible that ground could be broken on a portion of the transit village before the end of 2022 — which would be the last year of a second term for the mayor if he successfully runs for reelection, Liccardo replied, “I’d like to believe you would see that.”

Google is aware, however, that the downtown faces major construction to build two BART stations in the city’s urban core, including one at Diridon Station, along with a possible high-speed rail stop.

“Google is not eager to have its employees work in a construction zone,” the mayor said.

In addition to BART and high-speed rail, Diridon Station is expected to be a hub for light rail, Caltrain, Amtrak, ACE Train and Capitol Corridor train connections. That in turn, is starting to transform downtown San Jose into a hotbed for development efforts, new restaurants and office tenants.

“This is how large developments are going to have to be done in the future in Silicon Valley, because our freeways are just about closed,” said Mark Ritchie, president of Ritchie Commercial, a realty brokerage. “It’s getting harder and harder to get from here to there driving in a car. What choice is there but to be close to transit?”