Massive development projects coming to Santa Clara, San Jose

SAN JOSE, Calif. (KGO) -- Following years of extensive planning, and subsequent litigation, two major development projects in the South Bay are now set to move forward, after city leaders in San Jose and Santa Clara came to an agreement to put aside their differences.

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Today's settlement announcement paves the way for tens of thousands of future jobs and billions of dollars of development associated with CityPlace in Santa Clara and Santana West in San Jose.

In a joint statement, San Jose Mayor Sam Liccardo and Santa Clara Mayor Lisa Gillmor pledged to work together to find solutions related to traffic and affordable housing.

"We've reached a fair settlement that will benefit both of our cities' residents," the statement said. "This settlement will help our two cities better address the significant affordable housing and traffic congestion problems gripping our region."

CityPlace, a $6.5 billion, nine-million square foot mixed-use project (office, retail, restaurant and housing) will be built in phases, according to Santa Clara city officials. The City of San Jose initially filed a lawsuit to stop the project under the California Environmental Quality Act, citing insufficient housing inventory within Santa Clara city limits.

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The City of Santa Clara then filed a lawsuit of its own, saying Santana West's 970,000 square-foot office development near Winchester and Stevens Creek Boulevards on the cities' border would lead to greater traffic congestion.

Santana West, which is slated to be developed across the street from Santana Row, will replace the old Century 22 and 23 theaters. Officials are still trying to decide what to do with the Century 21 structure since it's a city historical landmark.

Under an agreement between the two cities, the City of San Jose will receive nearly $15 million from The Related Companies, the developer of CityPlace, for traffic improvements in North San Jose. The City of Santa Clara will not be required to build additional housing as part of this settlement.

Furthermore, the City of San Jose will pay the City of Santa Clara millions of dollars for traffic improvements and legal fees associated with the Santana West development. San Jose city officials stress that the funding will come from developer fees and not from the general fund.

CityPlace and Santana West are both expected to break ground within the next two years.

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