City of San Jose Buys Land Near Sharks Arena

A 3.6-acre parcel in downtown San Jose found a buyer in the City of San Jose itself.

San Jose City Council signed off on the purchase of 447 South Almaden Boulevard, a parking lot that was once slated for development by BXP, the Mercury News reported. The city paid $13.5 million for the site, which it has leased for years.

BXP listed the property in May after its plans for a proposed tech campus fell apart. The company, formerly known as Boston Properties, had owned the land since 2000, paying $35 million for multiple parcels from the city’s Redevelopment Agency. BXP hoped to build two 16-story towers with 1.4 million square feet of office space, 37,600 square feet of retail, plus amenity space and underground parking. As office space demand dropped after the pandemic, BXP gave up on those plans.

The site is across the street from the San Jose Convention Center and behind the Children’s Discovery Museum and Discovery Meadow. The parking lot is a reliable revenue generator for the city, but it could be transformed into a critical piece of downtown San Jose’s activity.

“Securing this property will provide greater flexibility for the city as we consider a range of possibilities, including potential convention center expansion or other sports and entertainment district uses such as a flagship hotel, retail, restaurants, arts and cultural venues, or other gathering spaces,” Kevin Ice, the city’s director of real estate, told the outlet.

The City of San Jose will use its commercial paper program to issue notes for short-term borrowing. Then it will use parking revenue and convention center funds to pay back the notes. Including financing costs, the acquisition is estimated to cost $15.7 million.

City officials are bullish on the idea of creating mixed-use districts around major sports venues. The city recently signed a deal with the NHL’s San Jose Sharks to keep the team in the city until 2051 and to renovate their SAP Center arena a few blocks away from the 447 South Almaden site.

— Chris Malone Méndez