Breaking: 10-tower office project proposed for San Jose

Architect Kenneth Rodrigues & Partners Inc. is working on the massive proejct, which would include 10, seven-story buildings.

Architect Kenneth Rodrigues & Partners Inc. is working on the massive proejct, which would include 10, seven-story buildings.

In one of the largest development proposals to hit Silicon Valley since Apple’s enormous spaceship, legendary builder Peery-Arrillaga has filed preliminary plans to develop two million square feet of office space in North San Jose.

But it remained unclear Friday afternoon whether the Palo Alto-based developer had a tenant in tow and, if so, who it could be.

The project is slated for more than 20 acres at First Street and Brokaw Road near Highway 101, according to documents filed Sept. 5 that I reviewed today at City Hall. On the parcels, owned by Peery-Arrillaga, right now? Bare land and the Bay 101 casino, which is set to move across Highway 101 in a few years.

“I think this is a very real project,” Mayor Chuck Reed told me on Friday afternoon. “The papers they’ve turned in represent a substantial investment of effort to get this far.”

The scope is breathtaking, even by Silicon Valley standards: Plans call for 10, seven-story office buildings totaling 2,025,350 square feet with 7,103 parking spaces, mostly below grade. That could house 8,000 workers using very conservative space-planning calculations. Rough math shows the buildings weighing in at about 200,000 square feet each. (For comparison, an average Costco is about 150,000 square feet.)

Cushy amenities disclosed in the plans include an underground pool; basketball, racquetball and squash courts; and a soccer field. Those perks put this squarely in the realm of the high-end tech campus, but no tenant is listed on the document.

Drawings included in the development application show sleek, curved glass-walled buildings set among meandering walkways and lush landscaping. A series of curved, elevated bridges appear to connect the buildings. (View the slideshow to see early renderings for the campus. Story continues below poll.)

Neither the famously under-the-radar Peery-Arrillaga nor the project’s architect, Kenneth Rodrigues & Partners, returned calls for comment.

Planning director Joseph Horwedel said he did not have any details about possible tenants but clearly welcomed the proposal. The location is along the city’s main jobs corridor that has blossomed with significant projects, most notably Samsung Semiconductor’s 680,000-square-foot project at North First and West Tasman Drive.

“This is the goal — to go through and bring taller buildings near transit and build a good work environment that will help these companies recruit,” Horwedel said. “This definitely creates a cutting-edge campus.”

Reed agreed: “It’s a beautiful project — exactly the kind of thing we were hoping to get in North San Jose when we approved our North San Jose plan.”

Horwedel said the project would likely be built in two phases, with the chunk that is currently bare land built first. Bay 101’s ground lease with Peery Arrillaga ends in 2017.

Tenant speculation

While no tenant is known, the amenities and more expensive below-grade parking would be highly unusual for a speculative, developer-driven project. And some insiders told me they’ve heard Peery-Arrillaga is working with a potential occupier. But it’s unclear how much space that potential tenant is seeking.

If the project is indeed envisioned as a single-tenant campus, there are only a few players with that sized appetite for space. Chief among them are Apple Inc.Google Inc. and Microsoft Corp.

Rumors of Apple’s interest in the site surfaced as recently as March 2012, when the Silicon Valley Business Journal reported that Peery-Arrillaga was working on a built-to-suit for the Mac Maker there that could see up to 1 million square feet. But plans for a project were never filed, and Apple’s anticipated 2.8 million-square-foot campus in Cupertino is also expected to sate, at least somewhat, its appetite for space.

However, Mountain View-based Google’s space requirement has been voracious, with nearly 700,000 square feet leased in the last month or so. It so far has been hesitant to enter San Jose. Still, Google raised eyebrows when it pressed pause in July on a 1-million-square-foot ground-up campus at NASA Research Park while it works out “design issues,” according to the company.

Another candidate could be Microsoft. While the company is expected to renew its 500,000-square-foot lease in Mountain View with real estate tycoon Carl Berg, word on the street has the Redmond, Wash.-based company still looking for another 500,000 to 1 million square feet of space on top of that.

None of those companies immediately responded to inquiries on Friday.

Peery-Arrillaga houses some of the Valley’s biggest companies: It is working with Apple on a 300,000-square-foot new project in Santa Clara. In Sunnyvale, it has signed LinkedIn to a 125,000-square-foot project.

There’s also the possibility that a tenant with a large space requirement could come out of nowhere. Seattle-based, for instance, is expanding in San Francisco. It’s building huge distribution facilities in Tracey. While its R&D unit last year leased nearly 600,000 square feet at Moffett Towers in Sunnyvale, perhaps it’s in need of even more space.

Still, some insiders told me Friday they’d be surprised if a tenant would walk by several projects that are essentially “shovel ready” — including the 43-acre “N1 Campus” from Lowe Enterprises, also on North First near the San Jose Airport, that is entitled for up to 2.8 million square feet, and Hunter Storm’s Coleman Highline, which allows up to 1.75 million square feet also near the airport.

Then there is Sunnyvale, where the Jay Paul Co. is working to develop roughly 2.5 million square feet of office in the Moffett area between two projects, Moffett Place and Moffett Gateway. Santa Clara also has two large spec projects — from Menlo Equities and the Sobrato Organization — built and waiting for tenants.

And some of the biggest occupiers — including LinkedIn, Nvidia and Intuit — have development projects already under way.

Mayor Reed told me the city was putting heavy resources to move the project through quickly. He highlighted quick work that got the Samsung application through the process in 50 days.

“We’ll apply all the things we know how to do to process this in a timely manner,” he said. “We’re going to do everything we can in this building to get it done.”


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