The Google Deal
- William Fulton
- Jun 6, 2021
- 5 min read
There is no bigger real estate development deal in California right now that the Google deal for a second, urban campus in downtown San Jose – 15 miles to the east of its headquarters in Mountain View. Last month, in a meeting that lasted almost seven hours, the San Jose City Council approved both the 720-age Google development agreement and a revision of the Diridon Area Station Plan to reflect Google’s plans.
There’s no question that, with the approval, San Jose has made a major commitment to Google. The development agreement essentially guaranteed Google’s ability to build its 80-acre project – under California law, a development agreement establishes a vested right to build – and is also providing Google some critical parcels of land. But Google, it would seem, is giving up more.
Uncharacteristically for large development agreements, the city is not paying for infrastructure – Google is. And Google is ponying up a community benefits fund of around $200 million, to be paid out over the life of the project. The extraordinary part of the deal is not what San Jose has promised to Google but what Google has promised to San Jose.
Diridon Station is located a few blocks west of Highway 87 – essentially on the other side of the freeway from most of Downtown San Jose. Diridon serves as the southern terminus for Caltrain and is also a center for the San Jose area’s light-rail and bus systems. While Downtown has experienced considerable dense development in recent years, little development has occurred around Diridon – it’s mostly still surrounded by parking lots.
