Cities of Santa Clara, San Jose Call Off ‘Border War’ Litigation

San Jose and Santa Clara called a truce in a legal fight over two massive developments along their shared border. The neighboring cities hammered out their settlements late last week, allowing City Place and Santana West to commence construction, pump billions of dollars into the local economy and create thousands of new jobs.

San Jose fired the opening salvo a few years ago by suing the neighboring city to halt the $6.5 billion City Place development—called the biggest project in the Mission City’s history—by claiming that it failed to include enough housing. The project by Related Companies is expected to bring about 25,000 jobs and 1,360 dwelling units, and had San Jose worried that it would bear the burden of housing the influx of new workers.

Santa Clara later shot back with litigation to block San Jose’s Santana West development at Winchester and Stevens Creek boulevards, alleging that their larger neighbor failed to adequately study the adverse environmental effects of the project.

The recent settlements come a just a few months after a San Mateo Superior Court judge ruled in favor of Santa Clara in the lawsuit filed by San Jose. Officials announced the news on the same day this week that a Santa Clara Superior Court judge was set to hear Santa Clara’s suit against San Jose.

Under the terms, San Jose will receive up to $15 million from City Place developer Related Companies for traffic upgrades. The settlement does not require Santa Clara to build more housing and creates no financial obligation to San Jose.

Santa Clara, for its part, agreed to dismiss its challenge to San Jose’s environmental impact report for Santana West. The deal requires San Jose to spend about $2.5 million on traffic improvements within its borders and $1.2 million for similar upgrades in Santa Clara before leasing the initial 300,000 square feet of space. It also requires San Jose to shell out $5 million to Santa Clara for transportation or affordable housing and another $145,000 to cover some of the latter’s legal fees. Further, the two cities agreed to work together to curb traffic problems along the Stevens Creek corridor.

Mayor Sam Liccardo’s spokesman David Low said San Jose can afford those obligations by drawing from developer fees already collected and funding from a separate deal with Related Cos. Some of the improvements were already planned anyway, he added.

Liccardo released a joint statement with Santa Clara Mayor Lisa Gillmor on Tuesday saying the compromise will benefit both cities.

“In addition to allowing these important projects to move forward,” they stated, “this settlement will help our two cities better address the significant affordable housing and traffic congestion problems gripping our region and provides assurances to continue to provide high quality of life for our residents, employees and visitors.”

City Place, which is slated for a site at 5155 Stars and Stripes Drive by Levi’s Stadium, will add about 5.7 million square feet of office space, 1.5 million square feet of retail, 1,360 homes and 700 hotel rooms in addition to a 30-acre public park.

Santana West, which the San Jose City Council approved in fall of 2016, proposes building 970,000 square feet of office space and 29,000 square feet of retail on 13 acres at Winchester Boulevard and Olsen Drive.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. > San Jose fired the opening salvo a few years ago by suing the neighboring city to halt the $6.5 billion City Place development—called the biggest project in the Mission City’s history—by claiming that it failed to include enough housing.

    This sounds like an excellent location for Santa Clara County to spend it’s $900 million in homeless bond money.

    That way the homeless could have excellent access to shopping and class A office space.

  2. At only $90,000 a unit for tiny house’s 6.5 billion? We could house 72000 illegal aliens, criminally insane, pot smoking people homeless people. But greedy peoples left wing governments would lose to much tax money!

  3. And the only losers in these projects are mainly the nearby residents of Santa Clara and San Jose of these oversized projects who were sold out by local politicians in the name of developer money. What a pity! Money always wins! Politicians are bought and sold as cheap pawns and have no morals or self respect.

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