Google land deal is an offer San Jose should not refuse
The San Jose City Council will vote Tuesday whether to approve selling 21.2 acres of downtown property to Google for $220 million. The sale would enable the tech titan to move forward with plans for a mega- downtown transit village that could eventually house up to 20,000 workers.
It’s a deal the council should not refuse.
The sale stands on its own merit. It’s possible that the city could squeeze a few more dollars out of Google. The company has a market cap of more than $800 billion. But consider this: New York and the Washington, D.C., area offered a total of more than $2 billion in incentives to Amazon to locate massive offices in Long Island City, New York, and Arlington, Virginia, that will each house up to 25,000 workers.
Contrast that with Google, which is paying full freight in San Jose for the land and future infrastructure costs. No tax breaks. No huge incentives.
The sale price of the downtown property is double the appraised value of a year ago. Holding on to the land for other use by the city is not an option. The property was formerly bought by the San Jose Redevelopment Agency. By state law, any property once owned by a redevelopment agency must be sold by December of this year.
There’s an even bigger issue at stake than the proceeds of the deal: A major part of the council’s job is to secure the city’s long-term future.
San Jose is the nation’s 10th largest city and located in the most innovative region in the world. Its residents deserve a vibrant downtown with thriving neighborhoods and worldclass services and facilities. The city has made progress on that front in the past 30 years. But it cannot fulfill that vision unless it attracts and retains major employers who become invested in the success of the city.
The sale represents a significant milestone in that direction. We hope it’s a step toward Google becoming a model corporate citizen, fully engaging in the community and doing its part to mold San Jose into a place where the best and brightest want to live and work.
For that, San Jose badly needs workers. It has the worst jobs-housing ratio of any major U.S. city. Improving the ratio would provide additional tax revenues, which would in turn allow the city to offer more services and more funding for infrastructure needs.
The good news is that Google is already committed to the city’s vision of a transit village in the Diridon station area. That means crafting an area with jobs, retail, entertainment, public spaces and housing. And yes, affordable housing. Google has agreed in principle to pay for needed transit improvements, infrastructure costs, construction taxes and a package of community benefits that will include affordable housing. But the details should be the subject of future negotiations with Google during the planning process.
The sale of the land comes first. The San Jose City Council should conclude that deal Tuesday.