San Jose wins bidding war for coveted ‘blue tent’ site
Officials believe the 4.4-acre property is vital to future plans to expand the convention center
SAN JOSE » The city of San Jose has emerged as the winner in a battle of bidders to buy the “blue tent” site next to the convention center downtown, agreeing to pay $47 million for the key property, government officials said Thursday.
The city of San Jose’s $47 million winning bid trumped bids from Santa Clara County and two private parties, according to Richard Keit, managing director of the government agency tha twill sell the choice parcel to the city.
“After the bids were opened Monday afternoon, wewere notified that the city was the winning bidder,” said Kim Walesh, San Jose’s director of economic development, on Wednesday. “We are overjoyed that we won the bidding.”
The 4.4-acre site that San Jose is poised to buy is located at 435 S. Market St. near Balbach Street and is distinctive for a huge blue tent that is the South Hall of the San Jose McEnery Convention Center downtown.
San Jose officials believe it’s vital for the city to control the site because it wants to be able to expand the convention center at some point.
“Even after the expansion of the convention center by adding 125,000 square feet for $130million, we already don’t have the opportunity to compete for a lot of conventions,” said Nanci Klein, the city’s deputy director of economic development. “There are trade shows and tech shows that want to come here to San Jose, but can’t, because we just don’t have the space.”
The property is owned by an agency that is the successor to the former San Jose Redevelopment Agency, which now is defunct after decisions several years ago by the state government. The city essentially was obliged to buy a site that it once
controlled through the redevelopment agency.
“We have a small convention center for a city of our size,” Walesh said.
The currently booming Silicon Valley economy, coupled with a rise in passenger traffic at Mineta San Jose International Airport, could bolster the view that the convention center could be in more demand.
“We have argued all along that this land needs to be used for a public purpose,” Walesh said. “It would be a public purpose to expand the convention center.”
It would make sense for San Jose to keep this property available for future con- vention activity, said Bob Staedler, principal executive with Silicon Valley Synergy. But Staedler isn’t convinced such an expansion would occur immediately.
“It’s a great asset for downtown San Jose and it’s good for cities to own these types of properties,” Staedler said. “But it could be years from now before the city expands the convention center.”
A study in 2016 by Convention, Sports & Leisure International, a consulting firm that researches the convention center market, examined whether the blue tent property could play a key role for the San Jose convention center.
“The South Hall Site is absolutely necessary for future convention center expansion sometime in the next 20 years,” Walesh stated in a 2016 letter prepared for the San Jose City Council that summarized key findings in the consultant’s report. The existing convention center covers 550,000 square feet.
Even if the convention center is physically ex- panded onto the South Hall site, it’s possible that a hotel tower could also rise on the site. The consultant calculated that an expansion of the convention center totaling 115,000 square feet to 125,000 square feet could still leave room for a high- density hotel. Such a “headquarters hotel” could accommodate 350 or more rooms, a big meeting space and a ballroom.
“Controlling parcels that are directly adjacent and connected to a convention center can be challenging, but is critical to maintaining long-termmarket share, and shouldbe a key community priority,” Convention, Sports & Leisure wrote in its report.