Caltrain plans offices next to transit hub
according to a staff report prepared for this week’s meeting of the joint powers board.
Caltrain expects the two towers would total 1.1 million square feet, according to the staff report.
The three-acre development site is bounded by West San Fernando, Cahill, Crandall and South Montgomery streets, the report stated.
Nearby, Google wants to develop a mixed-use village of office buildings, homes, restaurants, shops, hotel facilities, cultural hubs, entertainment centers and open spaces. The search giant’s interest in building a neighborhood near the train station and the SAP entertainment and sports complex has, in turn, spurred wide-ranging plans for the development of new office, residential, hotel, restaurant and retail sites.
San Jose could impose caps on development in what’s known as the Diridon Station Area. A plan for the area has sketched out a development framework for 250 acres in the vicinity of the train station. The Google mixed-use neighborhood is part of this area and covers 80 acres.
As a result, Caltrain staffers hinted that it could be wise for Caltrain to secure approval of its proposal before the development caps descend on this part of downtown.
“It is expected that additional commercial development in the Diridon Station Area will be in high demand in the coming years,” the staff report stated. “It is therefore imperative that Caltrain act swiftly to ensure that an appropriate amount of the development cap is allocated to the development parcels.”
After the caps are in place, future development proposals might have to navigate a bureaucratic minefield at City Hall.
The Peninsula Corridor board expects to submit a preliminary proposal in September to the San Jose planning staff as a trial balloon for the proposed towers project.
A formal and detailed application is slated to be submitted to the city sometime during the January-throughMarch quarter of 2022.
The city’s final decision is expected until sometime in 2023, after which actual development efforts would begin.
Caltrain, though, doesn’t intend to develop the project on its own but will instead seek out a developer to construct the buildings and the plaza.
“The Joint Powers Board will follow its typical practice, and all legal and procedural requirements, to engage a private sector development partner through a competitive process,” the staff report stated. Caltrain intends to retain the ownership of the land beneath the two office towers. Caltrain would negotiate a ground lease with the developer the transit agency selects.
“The developer would take on all development risk by financing, building and owning all improvements,” the staff report stated. “Caltrain would continue to own the development parcels and would collect rent based on the success of the development.”
Contact George Avalos at 408-859-5167.