SAN JOSE — Mayor Sam Liccardo, Vice-mayor Magdalena Carrasco, and Councilmembers Sylvia Arenas and Dev Davis recently announced the next steps of San José’s preparations for Google’s historic investment in Downtown.
Upon the City Council’s approval of a Memorandum of Understanding and property sale agreements on December 4, Liccardo and his colleagues will seek to move forward immediately with work on:
1. Negotiations with Google over community benefits above and beyond the fees, taxes, and public improvements that Google has already committed to pay, in consultation with the public
2. The formation of a downtown financing district, leveraging commercial impact fees or a privately-funded annual assessment for affordable housing, transit, and other public improvements
3. Making previously aspirational housing targets in the Diridon Station area mandatory, so that 25 percent aggregate of the housing to be built in those neighborhoods must be affordable, with long-term rent restrictions in place, using affordable housing funding from multiple sources
Liccardo and his Council colleagues will submit a memorandum requesting that the Council prioritize these objectives in the weeks following its approval of the Google MOU.
“From the beginning of our discussions, Google has been clear that it is not seeking subsidies, fee reductions, or tax breaks, and I have been clear that we wouldn’t be offering any,” explained Liccardo.
“As described in the MOU, Google will provide additional ‘community benefits’ in excess of what they are legally required to pay.” Liccardo continued, “Through the Diridon Station Area Process, San José and Google have provided a model that stands in stark contrast to the process followed by Amazon and other corporations who have sought large subsidies and presents a better model for the relationship between cities and tech employers. We won’t use our taxpayers’ dollars as bait. Instead, we’re working together with the community and Google to develop a mutually beneficial path that delivers far better value to the residents we serve.”
“We cannot deny that our community is rapidly changing, and the investment of Google will have a real and direct impact. We will continue the work on the preservation of the unique character of San José neighborhoods, including East San José, by mitigating displacement and gentrification while guaranteeing career opportunities for our youth and opportunities for upward mobility,” said Carrasco.
“A 25 percent affordable housing requirement is a major step in the right direction toward making sure no one from our community is left out,” Arenas said. “San Jose families need good-paying jobs and housing that is affordable. As a city, we must balance growth while protecting our community – that’s why it’s so important that we keep our community benefits process moving forward, while ensuring there are no taxpayer subsidies.”
“As a councilmember who values data, I’m excited about the job growth and tax revenue estimates that were calculated by city consultants for this proposal,” stated Davis. “This project will contribute millions of dollars of tax revenue annually and tens of thousands of jobs to a city that comes up short on both every year. It will help us enhance services for our residents.”
Google is not legally required to pay “community benefits” but, as described in the MOU, has volunteered to provide additional benefits in addition to tens of thousands of jobs, tax revenue, on-site infrastructure like sewers and parks, traffic mitigation improvements like road upgrades, impact fees, and construction fees. Those direct benefits — In addition to the very substantial indirect benefits of Google’s presence in bringing vitality to San José’s Downtown — are already assumed to constitute part of any project that the Council might approve.
It should also be noted that both the City and Google have agreed that a community benefits negotiation will precede any decision that the Council makes regarding land use designations, zoning, or changes in development height limits. Given the existing industrial designation on the sites, no development of any other uses — office, residential, restaurants, or any other use beyond a purely industrial use like warehousing — can occur on the future campus without Council approval. This leverage will be crucial to enable the Council to best negotiate for the community’s interests in the months ahead.
“We need to change the narrative about the relationship between cities and tech.” Liccardo continued, “Tech companies should be viewed neither as our saviors nor our supplicants.
Rather, we have an opportunity to show another way – for a civic partnership that builds a more prosperous, equitable, and sustainable San José.”