Downtown San Jose, Oakland opportunity zones attract investors, spur development plans amid Google effect

Developers eye projects in downtown San Jose and parts of Oakland, bolstered by tax incentives keyed to opportunity zone.

Developers and a new crop of investors are eyeing projects in downtown San Jose and parts of Oakland, bolstered by opportunity zones enabled by President Donald Trump’s tax-cut initiative.

Potentially the first project in a local opportunity zone would be development of a brand-new office and retail complex on South First Street in downtown San Jose at the site of the old Lido night club, said Erik Hayden, president of Urban Catalyst, a company that as formed an opportunity fund that would provide cash for selected developments in designated areas.

“These opportunity zones are ways to create greater economic activity in lower-income areas,” Hayden said. “They were originally presented to the Obama Administration but didn’t get a lot of traction. Then they became part of President Trump’s tax cuts and jobs act. San Jose Mayor Sam Liccardo very successfully lobbied Gov. Jerry Brown to get downtown San Jose included.”

Investors who plunk down cash for an opportunity fund can “defer or eliminate federal taxes on capital gains,” according to information on the state’s Department of Finance site.

The Lido night club site, currently a two-story building at 26 and 30 S. First St., is now owned by a partnership led by Gary Dillabough, who has emerged as one of downtown San Jose’s most active realty investors and developers. Among the properties Dillabough-headed groups have bought: the nearby Bank of Italy building, a historic office tower at the corner of South First and East Santa Clara streets.

 

 

 

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Fruitvale: Transit and Community

More than just a BART station.

metro or subway station may seem one-dimensional, a jumping-off point from one place to another. But some stations are destinations, drawing in visitors on the basis of their own merits. They may be architectural gems, like Grand Central Terminal in New York City or shopping meccas like Shinjuku in Tokyo. A few go beyond attaining this status and have become communities unto themselves.

Fruitvale Station is one such place. It’s a thriving transportation hub that also possesses the elements of a long-standing community.

I commute to the city from Fruitvale Station every day, witnessing this tangible sense of community up close. My daily journey here began in January 2009, just a few weeks after Oscar Grant was shot and killed by a BART police officer in the early hours of New Year’s Day. The tenth anniversary of the tragedy happened on January 1 of this year, marking a milestone that has largely defined the identity of the station.

Fruitvale ingests passengers not only from its namesake neighborhood but also from other areas of Oakland and adjacent towns — as evidenced by the busy AC Transit buses and the jam-packed parking. The ongoing stream of humanity begins in the early morning with commuters and school kids and continues until the last train departs for Warm Springs at 1:00 a.m.

The first clue that more is afoot than simply moving people is the Fruitvale Village sign that stands next to the station entrance. Fruitvale Village was developed in the early 2000s by the Unity Council, a nonprofit Oakland group, and became an early model of transit-oriented development.

The development is home to housing and multiple community organizations, including institutions that are hallmarks of any civic community: a health clinic, a public library branch and a school. It also features shops and restaurants, most of them locally owned, like neighborhood Mexican food fixture Obelisco (formerly the Taco Grill). In 2017, Reem’s, an Arab bakery, opened to much acclaim. Owner Reem Assil has been recognized by the James Beard Foundation and major food publications. Equally notable, Assil has made social justice a core value of her business by hiring local workers and providing a living wage.

Read more at The Bold Italic

Square takes over enormous Oakland building

Uptown Station, once meant to be Uber’s Oakland HQ, nets a new tech tenant.

Not too long ago, the circa 1929 Beaux-Arts building in Oakland now known as Uptown Station was meant to be the East Bay home of Uber, which had ambitious plans for the historic and recently refurbished locale.

But Uber sold the building almost exactly a year ago, netting $175 million from Oakland-based investment firm CIM Group but leaving the future of the sometimes neglected unofficial landmark up in the air.

On Thursday, CIM and Square announced that the SF-based payment app company owned by Twitter CEO (and Benioff antagonist) Jack Dorsey will lease much of the building, completing the locale’s long transition into an East Bay tech hub.

“Square has signed a lease for the entire office space in the iconic Uptown Station building,” according to a Thursday press release from both companies, a deal covering more than 350,000 square feet.

The building at 1955 Broadway first opened as an HC Capwell department store in the ‘20s, at the time apparently a very big ticket for Oakland as thousands showed up to see the mayor overturn the first shovelful of dirt on the future shopping hub.

Eventually, the building transitioned into being a Sears store instead, and for many years now has laid mostly dormant.

Developer Lane Partners spearheaded efforts to turn the disused retail Mecca into a new mixed-use office building before selling to Uber in 2016.

Square won’t actually move in until the end of 2019, possibly because CIM Group is still overseeing work that’s being done on the nearly century-old building.

“Oakland is committed to attracting businesses whose values align with our community. […] I believe Square can be that company,” Oakland Mayor Libby Schaaf said Thursday.

 

 

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San Jose moves toward ordinance limiting Section 8 discrimination

Landlords in San Jose would no longer be able to advertise that they don’t take rental vouchers.

San Jose took a step toward making it harder for landlords to turn away would-be tenants who use vouchers to help pay the rent.

This week, the San Jose City Council directed the city attorney’s office to draft an ordinance aimed at giving renters with subsidies, commonly known as Section 8 vouchers, a fair chance on the private rental market. The so-called source of income ordinance would not force landlords to take the vouchers, but it would ban them from judging potential tenants who use subsidies differently from those who don’t and from explicitly advertising “No Section 8” on apartment listings.

If everything goes according to plan, the council will vote on the ordinance in the spring.

While a number of landlords blasted the proposal, saying it would force property owners to navigate convoluted regulations and paperwork, the city’s Housing Department said an ordinance is necessary to make sure families are able to find affordable housing.

Right now, there’s no law that prevents landlords from turning away voucher holders, and a city survey found most do, leaving low-income families scrambling to find homes in one of the nation’s tightest housing markets. Several national studies suggest that when cities and states have such ordinances in place, the percentage of landlords turning away voucher holders goes down and more people with vouchers are able to find places to rent.

“Voucher discrimination is happening in San Jose,” said Jacky Morales-Ferrand, the city’s housing director.

Several landlords told horror stories about Section 8 voucher holders who left rental units in bad shape. But tenants and tenant advocates countered that there’s no evidence voucher users are any better or worse than people who don’t use subsidies.

“We can’t judge the actions of a few and put it on the majority of the people,” said Robert Aguirre, who has used vouchers. “Not all Section 8 holders destroy property or disrespect the people around them.”

“We see clients all the time who are not able to rent housing, have to move away from San Jose, have to live in cars. … it’s absolutely heartbreaking to see that and this ordinance would help,” said Nadia Aziz, an attorney with the Law Foundation of Silicon Valley.

 

 

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Public has great expectations for San Jose’s Diridon Station amid Google campus plans

City transportation planner: “This will be the only place in the Bay Area where you have so many transportation modes converging in the same place.”

In discussing his hopes for what will be the new Diridon Station in San Jose, Joint Venture Silicon Valley CEO Russell Hancock fretted about ending up “with is something that isn’t bold, visionary, and exciting…instead, we’ll end up with some common-denominator solution that nobody really loves but nobody objected to either.”

If the couple of hundred people who showed up Monday night for the first community input meeting on the Diridon Integrated Station Concept Plan are reflective of city residents as a whole, Hancock should have no worries.

One commenter said he expected “the most impressive train station in the world, the one people in other places will come to see to model theirs after.”

“This will be the only place in the Bay Area where you have so many transportation modes converging in the same place,” said Eric Eidlin, the city transportation modes converging in the same place,” said Eric Eidlin, the city transportation department’s station planning manager. “That’s one of the main reasons why our city’s policy framework seeks to concentrate a lot of the urban development that we’re expecting right around the station.”

 

 

Read more on the Silicon Business Journal

 

City passes plan for new SoMa homes

The San Francisco Board of Supervisors passed a sweeping, years-in-the-making plan to transform Central SoMa, potentially bringing thousands of new homes and tens of thousands of jobs to the area, and ending nearly a decade of wrangling over the ambitious package of zoning changes.

The city defines Central SoMa as the area south of Market Street, north of Townsend, and squeezed between Second and Sixth.

It’s a space that includes the San Francisco Museum of Modern Art (SFMOMA), swaths of low-income housing, nearly 30 landmark buildings, the Flower Mart, and, soon, a stretch of the Central Subway along Fourth Street.

The Central SoMa Plan changes zoning and height limits throughout the neighborhood to encourage more growth, more density, and more diversity of use in future development and redevelopment.

The final passage came as no surprise, after lawmakers unanimously voted in favor of the Central SoMa Plan the first time it came before the board in November.

But the ramifications of the proposal—which took eight years and ran over 1,600 pages in its final form—are so potentially profound as to generate an air of drama about the final vote all on their own.

 

 

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What Google’s San Jose project means for downtown

For years, much of the area around Diridon Station has been a neglected jumble of grimy auto body shops, vacant lots overgrown with weeds and shabby warehouses.

Google — whose plans face a critical City Council vote Tuesday — is expected to transform some 50 acres into a mix of offices, shops and restaurants connected by pathways that wind through parks and plazas filled with public art. Steps away, Diridon is set to undergo its own renovation and become the only place in the Bay Area where BART, Caltrain, Amtrak and high-speed rail converge.

It’s a tall order. But if the tech giant succeeds, the project could transform a downtown that has struggled to rebound from sprawling development in the 1950s and 1960s, when city manager Dutch Hamann rapidly annexed land at the city’s fringes while neglecting its urban core. When it’s complete, the area could support more than 25,000 workers, a 65 percent increase in the number employed in the core of the city today.

For longtime restaurateur and downtown business owner Steve Borkenhagen, Google’s foray into San Jose might finally spark the kind of urban rejuvenation he’s dreamed of for decades. For Kathy Sutherland, a nearly 40-year resident of the Delmas Park neighborhood in the shadow of the proposed development, the project brings both the long-sought possibility of a vibrant neighborhood and the fear of displacement. And for the urban studies theorist Richard Florida, the project is less personal but no less important — a chance for a major American city to finally get redevelopment right, to provide an antidote to the debacle of the Amazon HQ2 rollout.

It will be years before any such dreams or fears are fully realized, but the sale of more than $100 million dollars of city land — expected to be finalized at the Tuesday council meeting — sets the stage for planning and development to begin in earnest after months of closed-door talks and speculation about the biggest thing to happen in San Jose in generations.

 

 

Read more on the East Bay Times

 

 

Oakland’s building boom is giving rise to robos, virtual reality and other construction tech

With the building boom in full swing in Oakland, many contractors are using different technologies from productivity software to robots to improve productivity, efficiencies, and job-site safety.

Contractors that are ahead of the game are using drone technology, 3D modeling and building information modeling, virtual reality, print camera technology and mobile-friendly software, such as PlanGrid, which digitizes building plans and makes them accessible on any device. The startup was just bought by AutoDesk for $875M.

Nationwide, contractors are turning to these technologies to create better efficiency, supplement the workforce during a skilled-worker shortage and reduce mistakes and project costs.

Construction technology is still new to many contractors in Oakland, and it hasn’t yet been fully implemented. Because of this, some contractors are still running up against a lot of rework due to poor communication, PlanGrid Western Region Customer Advocate Ross Wagner said.

“Business out here hasn’t had the growth that San Francisco has had … but overall there certainly are people who are ahead of the curve in Oakland,” Wagner said. “The growth curve is just a little bit later.”

He said technology is allowing contractors to work together and increase productivity without having to go back and forth to the trailer to get information needed at the job site.

 

 

Read more on Bisnow Oakland

 

 

New effort to push more housing near transit stations by setting state rules

A state bill to allow dense housing near transit stops, alleviating long commutes and coaxing people out of cars, never made it out of committee last session. But backers think the mood has shifted enough in the housing debate to try again.

“I think the political climate is changing,” said state Sen. Scott Wiener, D-San Francisco. He’s the lead sponsor of the More HOMES Act — HOMES stands for Housing, Opportunity, Mobility, Equity and Stability.

“In talking to my colleagues, there’s more support than there was earlier,” Wiener said.

The new iteration, SB50, prevents cities from restricting density within a half mile of a major job center or transit hub, such as a BART or Caltrain station. It raises height limits to 45 feet, about four stories, within a half-mile of the station, and 55 feet or five stories within a quarter mile. It also eliminates minimum parking requirements for new developments, a move that the Board of Supervisors is contemplating for San Francisco.

Those provisions are less dramatic than what Wiener proposed in SB827, his first attempt at statewide zoning reform. It would have barred cities from rejecting four- to eight-story apartment or condo buildings near transit nodes.

Wiener’s first measure laid bare an ideological divide in a state struggling with soaring rents, jammed freeways and a paucity of housing. The crisis has pushed people farther from jobs, forcing them into wildfire zones or soul-grinding commutes, Wiener said. But it has also ignited fears that new development will push out existing residents — or drastically change the landscape. And many opponents bristle at the idea of Sacramento interfering with local governments’ ability to shape their own neighborhoods.

“The issue seems to be that Scott Wiener and his bills are so often looking to undermine local control,” said Susan Kirsch, founder of Livable California, a San Francisco organization that advocates for local urban planning and moderate growth. It opposed SB827.

Political leaders in San Francisco and Berkeley fumed at the building heights in SB827, saying it would allow luxury high-rises to sprout up, unchecked, in quaint residential neighborhoods. San Francisco’s Board of Supervisors passed a resolution against the bill after an emotional hearing in which residents compared it to a “hydrogen bomb” and an “undemocratic power grab.” Some detractors worried that their neighborhoods would be remade to look like Manhattan or Miami Beach.

To other critics, the original bill felt like an unfinished draft. It didn’t do enough to protect tenants from displacement or require affordable housing.

“It felt like it was a big proposal, it was a bold proposal, and there were a lot of details that had not been sufficiently worked out,” said Anya Lawler, a policy advocate for the Western Center on Law and Poverty. The center opposed SB827 but has not taken a position on the new bill.

Yet in the last few months, the tenor of the debate has changed. London Breed was elected mayor of San Francisco on an ardent pro-housing platform — she’s among the politicians tentatively supporting Wiener’s revised legislation. In September, the Legislature passed a law empowering BART to fill station parking lots with homes. And Wiener is seeking an ally in Gov.-elect Gavin Newsom, who emphasized the link between housing and transportation in a post-election speech.

 

 

Read more on SFGate

 

 

 

Billion-dollar deal: Google pays $1 billion for huge Mountain View business park

In a head-spinning mega-deal, Google has paid $1 billion for a huge Mountain View business park, the Bay Area’s largest real estate purchase this year.

It is also the second-largest property purchase in the United States this year, eclipsed only by another Google acquisition, the $2.4 billion the company paid for Chelsea Market in Manhattan.

The newly acquired site in Mountain View, where Google has been the primary tenant, is larger than the property that accommodates the company’s Googleplex headquarters a few blocks to the west, and also exceeds the size of the parcel across the street where Google is building an iconic “dome” campus that features canopies and tents.

“Wow. What a deal,” said Chad Leiker, a first vice president with Kidder Mathews, a commercial real estate firm. “This is an opportunity for Google to own more office space very close to their headquarters. That office space is becoming very rare in Mountain View.”

Google’s Mountain View purchase means that in the two years since the search giant began to collect properties in downtown San Jose for a proposed transit village, the company has spent at least $2.83 billion in property acquisitions in Mountain View, Sunnyvale, downtown San Jose and north San Jose alone.

 

 

Read more on The Mercury News