Seven months ago, I submitted an opinion piece raising concerns about the lack of a thoughtful strategy to guide downtown San Jose’s post-pandemic economic recovery. Unfortunately, since then not much has changed.
There is still no guiding plan and fundamental indicators of downtown’s economic health remain discouraging. Office vacancies have now pushed over 30%, return-to-work rates remain among the lowest in the nation and major developments such as Google’s Downtown West, Platform 16, Nabr and Icon are all on hold. A recent survey of regional residents by Bay Area News Group and Joint Venture Silicon Valley found a staggering 76% agree with the following statement about downtown San Jose—“I don’t have a reason to visit.”
While many challenges exist for downtown, the unprecedented character of this economic downturn presents a unique opportunity to reset our strategies. Rather than obsessing about crime and homeless as insurmountable deterrents to recovery, it’s time for policymakers to start strategizing and building the downtown growth sectors of the future. Since no downtown vision or strategy has been developed, I am going to toss out three ideas as food for thought and fodder for criticism in the spirit of public discourse.
First, as a base assumption, I believe the shift to hybrid work is here to stay. Downtowns that have relied heavily on high-rise towers stacked full of 9-to-5ers must change. Office workers are no longer the foundation that sustain our downtown restaurants, professional and personal service businesses, caterers and other service providers. To address this, we should examine what industries are more firmly rooted in consistent in-person interactions. For example, some downtowns are leaning into health services or hospitality/tourism.
For San Jose I believe we should develop strategies and invest aggressively into establishing downtown as a regionally important education hub. We already have important assets to build upon including San Jose State University, Northeastern University’s Silicon Valley campus, Lincoln Law School, Notre Dame High School and the new Hillbrook Upper School.
In addition, numerous downtown cultural organizations operate robust education programs including The Tech Interactive, San Jose Museum of Art, Children’s Discovery Museum, MACLA, Guadalupe River Park Conservancy, CreaTV, New Ballet, San Jose Jazz and many others. Hillbrook recently chose to locate their new high school campus in downtown San Jose specifically due to the educational resources available in downtown. Assets such as the Martin Luther King Jr. Library, corporate internships and robust public transit all reinforce the educational opportunities for downtown. Students, faculty and staff can also be a key market for new, dense residential development in the downtown core.
Second, downtown should formalize an arts and entertainment district strategy and establish return-to-source funding mechanisms to reinvest taxes generated from the district back into improvement and growth of the district’s programming and marketing. Downtown San Jose has a proven track record of success hosting cultural, sporting and entertainment events and programs.
Among the few economic indicators that have shown somewhat positive news for downtown San Jose has been sales tax receipts. While plummeting office occupancies have decimated weekday daytime sales of all kinds, evening business in downtown has carried the weight of daytime losses. Recent news coverage of the economic impacts of major events such as Taylor Swift, Beyonce and Ed Sheeran at Levi’s Stadium exemplify the significant returns that cultural and entertainment programming can multiply throughout the local economy.
According to San Jose’s own analysis, the San Jose Jazz Summer Fest annually generates an estimated $13 million in economic impact with almost $500,000 directly flowing into city coffers through various taxes and fees. Numerous cities from Montreal to Albuquerque have created arts and entertainment districts that leverage their strengths to drive programming and create reasons for residents and visitors to spend time and money in their downtowns.
While other cities are further along than San Jose, the good news is that San Jose does not need to reinvent the wheel. New York City’s Making New York Work for Everyone Plan is chock full of strategies adaptable to San Jose. San Francisco’s Roadmap to the Future plan includes specifics related to the creation of a designated arts, culture and entertainment zone that can serve as reference points for our own strategies.
Third, San Jose should invest boldly in developing an urban quality-of-life infrastructure in downtown that will stimulate much needed residential development and visitors.
For example, downtown parks must become much better community assets if downtown is to succeed. Capital improvements and repairs are desperately needed. The city should commit to increased park ranger presence, as well as to robust seasonal programming. Downtown parks need to become much better recreational resources. Access to good public parks and recreation is also an important equity concern and public health strategy. Green spaces, tree canopies and proximity to water elements are all needed to help establish downtown as an attractive urban environment to live and work in.
Downtown San Jose is also fortunate to have robust public transit infrastructure. This competitive advantage should be leveraged. San Jose should pursue a collaboration with VTA to make transit by light rail free throughout the downtown zone. From the Tamien Caltrain station in the south to the Metro/Airport station in the north, and from Diridon Station /SAP Center in the west. VTA light rail fare recovery is already so low it is worth considering a bold shift to simply provide free access within the downtown urban zone as a public resource.
Certainly, there are plenty of other and better ideas than these that could also be developed. Such ideas will need resources for development and implementation.
The San Jose City Council is scheduled to hold a study session on Nov. 30 to explore funding mechanisms to support arts and tourism recovery—two sectors critical to downtown’s future. This opportunity should not be wasted. The council should come out of this study session with actionable recommendations on how to drive visitors that can be incorporated into the Fiscal year 2024-25 city budgeting process.
Brendan Rawson is executive director of San Jose Jazz.