Terra Ventures swaps entertainment plans for data center in San Jose

Terra Ventures has jettisoned plans to build restaurants, shops and two hotels in North San Jose, opting for a power building and data center instead.

The developer has filed plans for a three-story power building, two-story data center and small retail building at Topgolf Drive and North First Street in the Alviso district, the San Jose Mercury News reported.

Initial plans in 2018 had called for a Shops @ Terra entertainment district to include a Topgolf complex, restaurants, shops and hotels. The Topgolf, which offers high-tech driving ranges, opened in 2021.

But the rest of the approved project north of the Guadalupe River was never built. That includes a five-story hotel still in the planning stages in spring of last year, according to the Silicon Valley Business Journal.

New plans call for a 174,400-square-foot power plant, a 172,500-square-foot data center and a 15,000-square-foot building for shops on 9 acres. The proposed retail building is under a separate filing.

The windowless power station and data center, designed by CallisonRTKL, have wavy white slats above a pattern of green or gray rolling hills, according to a rendering.

Data centers are in demand since artificial intelligence and smart devices require more information technology services and systems, real estate experts say.

“Data centers can provide a lot of tax revenue for the city due to the equipment in the data center,” Bob Staedler, principal executive with Silicon Valley Synergy, told the Mercury News. “Development of a data center will result in higher property values and property taxes.

“The demand for data is only going to grow.”

He said an entertainment district dotted with numerous shops and restaurants might have faced tough competition from popular mega malls in San Jose, including Westfield Valley Fair and Santana Row.

“When you see how busy Valley Fair and Santana Row are, it’s hard to compete against destinations like these,” Staedler said. “It’s important for the city to take advantage of opportunities when they come rather than hold out, hoping to realize the dreams of a specific use that will face a lot of challenges.”

In May, Pine Tree Investment & Management bought an approved site for a 200-room hotel at 7 Topgolf Drive, near the Topgolf complex. The South Korea investor bought the 3.2-acre lot for $27.6 million after acquiring a delinquent loan.

— Dana Bartholomew

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