San Jose needs to grow up more than out, according to city leaders who want to extend high-rise developer incentives another few years.
The Rules and Open Government Committee on Wednesday will consider the new plan, which would continue a program adopted by the City Council last year that saves builders millions by giving them a half-off discount on park fees and construction taxes. The catch is developers must build at least 15 stories high. The tradeoff, according to city officials, would mean losing out on revenue that pays for roads and transportation in the short term, but big gains in the long run.
Downtown’s high water table, high costs and low-height limits due to flight traffic make it a tough market for developers to break ground, reads a memo authored by Mayor Chuck Reed and Councilmember Sam Liccardo, who represents the downtown district.
The memo adds that tower construction is too costly, too risky and won’t happen for another decade without incentives, which have already allowed a couple companies to begin plans to start building this year.
“All of our collective ambitions for the revitalization of the downtown hinge on our ability to bring thousands of more residents into the core,” the memo says.
A high-rise adds about $150 million to the assessed value of the land beneath it, a boon to the city’s tax rolls, the memo notes. Unlike other housing developments, apartment towers actually make money for the city. It’s also the most sustainable way to house future population growth, cutting commute hours and greenhouse gas emissions by accommodating housing close to downtown jobs.
Some developers tried to take advantage of the price breaks, but for reasons beyond their control couldn’t manage before the expiration date, Reed and Liccardo argue. Symphony Development tried to buy up property from the Redevelopment’s successor agency but bureaucratic fights between the city and state halted the project and prevented the site from getting rezoned to allow high-rise construction.
Liccardo and Reed say they hope news of new high-rise construction in San Jose will encourage investors and developers to flock to downtown.
• Earlier in the year, the city conducted a phone survey and held a priority-setting session to hear what residents want out of the city’s 2013-14 fiscal year budget. Council will meet from 1:30-5pm Monday to talk about the results and kick off the months-long budget planning process.
• About a year ago, the city temporarily lowered traffic impact fees for construction in North San Jose, dropping it from $12.69 to $5 a square foot. Similar to the high-rise incentive, the idea was to lure developers and existing companies looking to expand. Mayor Reed wants to update the program’s coverage area to include Samsung’s expansion, Ellis Partners 101/Tech construction and a new parking structure at the Cisco Systems campus.
Traffic impact fees rake in money for roads and other infrastructure affected by the uptick in traffic brought by new construction.
• The San Jose/Santa Clara Water Pollution Control Plant (WPCP), the largest treatment facility on the West Coast, needs a new namehttp://ca-sanjose.civicplus.com/DocumentCenter/View/11762 to better reflect “its wastewater role and regional service area,” says Kerrie Romanow, head of the city’s Environmental Services Department. The rules committee will add that assignment to the council’s Transportation and Environment Committee 2013 work plan.