County rejects housing proposal for City Hall Annex

Developer, construction firm chief envision lodging for homeless; supervisors favor building a parking lot

With affordable housing in critical shortage and thousands of homeless people sleeping on the streets, Santa Clara County’s plan to demolish the old City Hall Annex in San Jose and temporarily convert the space to a parking lot instead of housing has a few people riled up.

The Board of Supervisors is set to vote today on approving the master plan for the area, which calls for tearing down the Annex and putting in some 170 parking spaces.

That plan has a prominent real estate developer and the founder of a major local construction company seeing red. The building, they say, should be converted to housing for formerly homeless people.

In a July letter obtained by the Mercury News, James Salata, the president of San Jose-based Garden City Construction, blasted the county for rejecting a proposal to house more than 100 homeless people without giving it careful consideration. The county received the land in 2011 as part of a settlement in a lawsuit with the city.

The site — near North First Street and West

Mission Street — is a good fit for such housing, Salata wrote, because it is near county services and public transportation and is somewhat removed from surrounding residential neighborhoods.

In an interview Monday, Salata said proponents of the idea are confident there is enough philanthropic interest to pay for the housing if the county would provide the site rent-free.

John A. Sobrato, founder of the real estate development firm The Sobrato Organization and a major philanthropist in the area, appears to be on board.

In an email obtained by this news organization, Sobrato wrote, “(W)e have an opportunity to get 150 or more chronic homeless off the streets in about a year. While we wait to build new (Permanent Supportive Housing) units with bond money, many more folks will die on San Jose streets.”

Voters in the county passed a $950 million bond measure in 2016 — Measure A — for permanent supportive housing. And while the Annex site would not be eligible because it will only temporarily be available (there are long-term plans to redevelop the entire area, which is also home to a number of county offices and the county jail), there are thousands of people in the county who sleep on the streets on any given night.

“I wish the (Destination: Home Board) could take a position supporting Jim Salata’s plan to convert the old San Jose City Hall annex to a building providing 150 or more (supportive housing) units plus some family units for 1/3 the cost of building new and in 1/3 the time for a ground up development,” Sobrato wrote.

“I am confident we can raise the money for the conversion from the philanthropic community and it won’t cost the county anything other than a lease on the building for at least 10 years and save 2-3 (million) in demolition costs plus the costs to build a parking lot when there is under utilized parking nearby,” Sobrato continued. “The way the county bureaucracy moves, there is no way the county site can be converted to a revenue source for private development in the next 10 years.”

But Destination: Home, a homeless advocacy group that has rallied behind building supportive housing in the city, has so far remained quiet, at least publicly.

In an interview Monday, Jennifer Loving, who runs the nonprofit, said her team hadn’t been involved with the proposal and had never worked with Salata before.

“The county has already approved 10 Measure A projects,” Loving said, “and has been a leading partner in increasing the supply of supportive housing.”

In an interview Monday, David Barry, the chief of facilities planning services for the county, said the county has been transparent about its plan to demolish the annex for years and held multiple public outreach meetings. Turning the Annex into housing, he said, would be a complicated process and could interfere with the broader plan to rework the entire area in the future.

In the coming years, the county wants to construct a revitalized civic center, with social services, public safety and other offices all centered in one easyto-access location. A draft of a master plan for the area paints a picture of a space filled with public art and cafes where the community can gather.

“I don’t think it’s as easy or as quick as they are portraying,” Barry said.

And, Barry continued, the county needs more parking.

“We’ve continued to see a rise in the number of full-time employees that the county has been hiring,” he said.

The county, Barry said, is open to working with the city to include permanent supportive housing for formerly homeless people as part of an “urban village” planned for that part of town in the future and has a number of other supportive housing projects in the works.

But San Jose Mayor Sam Liccardo sent a letter to Board of Supervisors President Joe Simitian on Monday indicating he’d be supportive of using the space to house formerly homeless people.

“If there is any interest in the potential adaptive reuse of that building for affordable housing, the city is willing to discuss what supportive role we might play,” Liccardo wrote. “Back in June, the council unanimously approved my budget message, which called for setting aside half a million dollars for more creative, cost-effective development options for housing our homeless residents. That message explicitly identified the concept that Jim Salata has proposed as one example of such a development concept.”

“I think it’s all really kind of up in the air,” said Supervisor Dave Cortese, adding that the space could ultimately be home to taller housing in the future that could serve more people than Salata’s proposal could accommodate.

“We can build housing there that’s much more dense in the future,” Cortese said.

Still, Salata, who insists he’s not “looking for a job,” thinks turning the Annex into parking is a missed opportunity to address San Jose’s persistent homeless problem. He doesn’t want San Jose to end up like San Francisco, he said, where groups have declined to host conventions because of that city’s homeless crisis.

“It’s not about me,” Salata said. “It’s about doing the right thing period.”