The safe sleeping site was opened last September with the goal of being a temporary stop for homeless people being connected to more permanent housing. But now, the city says it doesn't have the money to keep the hub open.
"We are entering this budget season with a significant deficit, a $56 million shortfall to start. So, there are tough tradeoffs to be made there," said Anthony Tordillos, the city councilmember representing this district.
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He says given the long timeline before the closure, he doesn't expect anyone living there to be pushed back onto the street.
"We are fortunate that as a city, we've been able to invest in bringing well over 1,000 beds of new shelter online last fiscal year. So, we have more capacity," said Tordillos.
For some time now, San Jose has billed itself as a model on how to tackle homelessness in California.
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However, several who work in that space think the city council and Mayor Matt Mahan have oversold that narrative.
"Every time we see Mahan's commercials that he's running for governor based on solving homelessness, I think everyone who works in homelessness just sort of laughs," said Shaunn Cartwright, a local homeless advocate.
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Cartwright believes if money is the issue, the city can find other ways to cut costs.
"If they're saying that they need to save money, they can save money on sweeping people. Because sweeping people, that's where we're losing all of our money," said Cartwright.
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The City Council still needs to vote to formally approve the site's closure.
Mayor Mahan says he's open to opening other safe sleeping sites in the future.