Wednesday, March 16, 2016

Plans firm up for industrial-chic Railyard Place in San Jose

Eight months after acquiring a 10.6-acre site on the edge of downtown San Jose, Insight Realty Co.’s plans for what it’s calling Railyard Place are starting to come into focus.

The development firm turned in fleshed-out plans last week for a mixed-use project that would include a 230,000-square-foot office building and 476 apartment units, all wrapped in an industrial look — complete with faux smokestack — that executives say will attract corporate tech tenants and their workers.

“The office building almost looks like an old textile factory you’d see in Boston,” said Insight managing director Dennis Randall. “Those old factories used to have their own power plant, and the smokestack is reminiscent of that, to give it a true industrial vernacular. Then we’re basically building a SoHo-style neighborhood around it.”

The proposal would transform a site that has long sat fallow and largely cut off from the rest of downtown. It is located where Highway 87 crosses over Coleman Avenue, between a PG&E substation and the Union Pacific Railroad, and fronts the Guadalupe River Trail. To make the site developable, Insight will have to build a new bridge over the river to connect to Autumn Street, at a cost of at least $5 million, Randall said. “It’s an improvement for the entire area,” he said.

But a bigger challenge might be zoning rules. The land is currently zoned for commercial use only, and San Jose’s policy prohibits changing industrial sites to allow housing without a general plan amendment. Officials worried about the city’s low jobs-to-employed-resident ratio have for years resisted granting those, because of a fear that it could open the door to widespread conversions.

“It’s an interesting concept, but we have this hard line in the sand with the general plan,” said Michael Brilliot, a planning division manager for the city. “So everyone’s talking about it, saying, ‘What do we think.’”

Brilliot said the city isn't saying "no" to the concept at this point, just that more study is needed to figure out how it could work within the city's goals and policy framework. "One issue the city will have to grapple with is anytime you allow someone to convert a site, you have to ask, what are the unintended consequences," he said. "Why not there, there and there — and everyone will start lining up."

Randall says the concept for Railyard Place — with the housing — actually brings more jobs to the site than Insight would have to do under existing zoning, which would allow, for instance, a low-density industrial or R&D building. “We’re providing over 1,000 jobs on it,” he said. “I could build 135,000 square feet of industrial which would be 250 jobs.”

The residential, he said, is necessary to get the financing for the project as a whole — and is actually a big attraction point for tech office tenants.

“We have several tenants talking to us, and they love the residential being next door,” Randall said. “It helps them recruit talent. They might not live there forever, but it helps them get to know San Jose.”

The city’s jobs targets and policies regarding industrial lands are also being discussed in the context of the ongoing update of the Envision 2040 General Plan, which I’ve written about here. There is increasing consensus that San Jose’s job goal is probably too ambitious, but it’s unclear how a lower target could be reflected in land-use policies; and, in any event, the general plan update won’t address specific sites, such as Railyard Place.

While Randall said he supports job growth in San Jose, the hard prohibition on residential in certain contexts, especially so close to the core of downtown, “is small-town thinking. ... And the thinking has to change if we’re going to bring thousands and thousands of residents downtown,” he said.

Insight is proposing to build the project under a Planned Development permit, which allows zoning to be fine-tuned for the neighborhood and to support complex or unique projects. “With the PD Zoning, we are proposing exactly what we’re going to build,” Randall said. “It’s not an amorphous general plan amendment with a promise to build ‘something.’ It will give the city exactly an idea of what we want to build. We want it to be iron clad, and we want to build the office and the multifamily, and we think they’ll both go up together.”

Despite the uncertainty, Randall said he expects Insight could get approvals by October, “and we’re gearing up to break ground minutes after.” Lining up a capital source he said was no problem given the current economic environment.

Railyard Place is one of several developments with significant commercial components being proposed for the downtown area. Last week, Trammell Crow Co. showed off new pictures of its project near Diridon Station. More may be coming: Insight is working with the city of San Jose to acquire a development site next to The Tech Museum for a mixed-use tower. A group called SJSC Properties is also planning a two-tower office complex across from San Jose's City Hall.

Source: Silicon Valley Business Journal, Nathan Donato-Weinstein
http://www.bizjournals.com/sanjose/news/2016/03/09/plans-firm-up-for-industrial-chic-railyard-place.html

No comments:

Post a Comment