11 April 2006

Santa Clara County - San José settlement

The long, bitter battle between Santa Clara County and San José appears to finally be over. A $33.5-36.5 million settlement to be paid by the City will go towards a new crime lab (excellent idea IMO). City and County had squared off in dueling lawsuits over County's desire to build a 7,000-seat, House of Blues-run concert hall on the County Fairgrounds. City wanted the concert hall downtown, either next to the new City Hall or across the street from St. Patrick's Cathedral.

The settlement doesn't mention anything about the concert hall, which leaves County with a dilemma: Do they go forward with it? Frankly, putting a swanky auditorium on County Fairgrounds makes little sense due to its location and lack of ancillary development, and when accounting for rising costs and litigation expenses, the concept may be less feasible than before. There happens to be one other venue that, because of a similar white elephant status, is now closed: Henry J. Kaiser Center in Oakland. SF's Bill Graham Civic Auditorium and SJ's Civic Auditorium have also struggled at times. Here's a suggestion for County: a soccer/football stadium with adjoining fields.

Beyond the concert hall, there are a few important impacts. Chief among them is that City will be able to go forward on its North San Jose development plans. City will still need to contribute other money for transit projects and it has issues to iron out with neighboring Santa Clara and Milpitas, but this is basically a green light. While most of the first phase of 5,000 housing units is spoken for, plans eventually call for up to 32,000 homes and 26.7 million square feet of office space. The glut of available commercial space makes office expansion unlikely, but homes can work should related infrastructure be built accordingly.

This potentially opens the door for the A's, who would have difficulty putting 2,000 homes anywhere near the Diridon South site (my guess is about 800-1000 tops). As part of a ballpark deal, SJ Redevelopment could local steer local tech firms with excess land towards the A's. That would allow the financing of a ballpark to take place and, more importantly, create a more palatable ballot measure for June 2007 that looks quite similar to the deal SF made with the Giants - only the A's wouldn't be overly dependent on ballpark-based revenue streams to pay the mortgage.

One problem with the deal: the settlement will come out of City's Redevelopment funds - the same funds that are being used to buy Diridon South. Will City have to sell additional land to finish the Diridon South purchase? Or will the payment occur after Diridon South is purchased?