Can new offices help revive Downtown San Jose?

Business in Downtown San Jose is dead, with retail sales taxes tanking. But officials say new office projects such as Google’s pending transit village could revive commerce in the heart of the city.

While sales taxes across San Jose have nearly recovered from the pandemic, sales taxes in the Downtown area have plunged 38.5 percent below their pre-COVID levels, the San Jose Mercury News reported. Citywide, sales taxes have slipped only 1 percent.

City officials pointed to high-profile malls to the west of downtown — Santana Row and Westfield Valley Fair — doing bang-up business.

“You go to Santana Row and it is booming, you see people all over the place,” said Rosalynn Hughey, San Jose’s deputy city manager, at a gathering sponsored by law firm Hoge Fenton to discuss real estate in the city. “You go to the downtown, it’s quiet.

Downtown office vacancies caused by work-from-home policies begun during the pandemic have taken a toll. But new development may help draw people to patronize its shops, restaurants and services.

That includes Downtown West, Google’s plan to build a mixed-use transit village of offices, apartments and retail stores on 80 acres near the Diridon train station and SAP Center, where it could employ up to 25,000 people.

Plans call for between 4,000 and 5,900 homes, 7.3 million square feet of offices, 500,000 square feet of shops and restaurants, a community center and 15 acres of parks. Google is now preparing for its first phase, city officials say.

The board that oversees Caltrain plans to build two Class-A office towers containing 1.2 million square feet next to the Diridon station, with ground-floor retail.

There are also more than 2 million square feet of offices being built Downtown that could help pull it out of its business slump.

Jay Paul Company, based in San Francisco, is constructing a 19-story office tower at 200 Park Avenue. The 965,300-square-foot building could host as many as 4,800 workers.

Boston Properties, based in its namesake city, is constructing the first phase of a 1.1-million-square-foot tech campus at 440 West Julian Street. The 390,000-square-foot building could house up to 1,900 people.

Adobe, based in the city, is constructing a fourth office tower at 333 West San Fernando Street. The 18-story North Tower will contain 700,000 square feet of offices and could accommodate 3,000 people. It’s set to open in the first half of next year.

More Downtown office space could include Park Habitat, a 1.2-million-square-foot highrise at 180 Park Avenue, when Canada-based Westbank resumes construction. The 20-story tower would contain offices, stores and museum space that could allow an unspecified number of employees to work in a garden, according to the Mercury News.

— Dana Bartholomew

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