Google village could reach $19 billion value

Mixed-use neighborhood planned by tech giant is poised to be a game changer

SAN JOSE >> Google's proposed transit-oriented neighborhood in downtown San Jose might reach an overall value of $19 billion, a lofty figure that underscores the project's dramatic impact.

That jaw-dropping estimate of the project's value includes an array of costs associated with the village, which is expected to require more than a decade to be fully built out in phases, according to Nanci Klein, San Jose's director of economic development and cultural affairs.

“$19 billion is what is being talked about,” Klein said. “It's a very rough estimate, very preliminary.”

Among the components of the approximate estimate of the value: development, construction, infrastructure and other potential costs and expenses associated with the Google village, which is called Downtown West.

Downtown West would sprout on 80 acres near the Diridon train station and SAP Center on the western edges of San Jose's urban core.

Google's transit village would create a new neighborhood along a narrow stretch that's dotted with older commercial and industrial buildings, homes, junkyards, former retail sites, warehouses, empty structures and vacant lots.

“This will be the most robust and largest development in San Jose in recent memory,” Klein said.

Google's mixed-use neighborhood is slated to accommodate up to 7.3 million square feet of offices, 4,000 residential units, 500,000 square feet of retail space that would include shops and restaurants, 300 hotel rooms and 15 acres of open space.

The only rival in terms of size for Downtown West is a huge tech campus that Cisco Systems developed decades ago in north San Jose.

The Cisco campus totaled about 6 million square feet and was a state-of-the-art tech hub when it sprang up on the north side of town.

“The Downtown West project is a transformative project for San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land use consultancy. “The additional value it will create will benefit the immediate area and the entire city.”

Google's village is poised to shift how people think of office buildings and how such employment hubs are woven into the fabric of urban centers, opined Scott Knies, executive director of the San Jose Downtown Association.

“Downtown West is doing more than just creating an office campus; it is creating a social district,” Knies said. “The office buildings will be the center of this social district.”

A Google spokesperson said the company wished to hold off on comment ahead of a key San Jose City Council vote Tuesday regarding approval of multiple community benefits programs that Google has agreed to fund.

One huge magnet for this project: the current and future transit links at the Diridon train station.

Diridon Station at present is a hub for Caltrain, Amtrak, ACE Train, light rail, Capitol Corridor and bus connections.

The transit center is expected to become busier when a project to electrify Caltrain will increase the number of trains linking San Jose and San Francisco. BART is expected to construct one of its stations at the Diridon complex. And it's possible that high-speed rail trains someday might zoom into the station.

“Putting a project of this magnitude adjacent to transit is the best outcome for the transit agencies,” Staedler said.

The construction of the infrastructure for the project could begin in about three months, estimated sources familiar with Google's plans. The vast infrastructure endeavor is expected to take about 18 months to complete.

That time frame suggests the vertical construction of the first office building could occur in 2024.