San Jose’s negotiations with Google have dominated headlines over the past two years, but only a handful of the City Council’s conversations about selling key pieces of land near Diridon Station happened at public meetings.
The rest — 14 of them — happened behind closed doors where city leaders got down to the brass tacks and hammered out the details of a deal including raw numbers and lease-back agreements. Half of those meeting recordings were lost — despite a city policy to keep such recordings — because officials had trouble working the recording equipment.
San José Spotlight reviewed transcripts from half of those 14 meetings, the other half unavailable due to the recording mishap the city has chalked up to “human error.” Still, there’s something to be gleaned from the transcripts as Google prepares to unveil its preliminary plans for the Diridon Station area next week.
To be clear, using closed sessions to hammer out the details is not an uncommon way for cities to work out complex land sale deals like the one San Jose made with Google. It is uncommon, however, that transcripts of such meetings would ever be made available.
But the cachet of the tech titan’s name brought unparalleled attention to the negotiations.
A set of nearly 20 nondisclosure agreements with Google signed by public officials raised eyebrows, though the city says the agreements are no longer active. Anxiety around the vague details about Google’s plans once it gathered up the land it needed stoked fears about potential gentrification, congested streets and the changing fabric of a critical part of the city.
But there was also undeniable excitement from some lawmakers and downtown boosters. San Jose has been envisioning the level of growth Google promised to bring to its downtown for decades. Another 6 million to 8 million square feet of mixed-use development and around 25,000 new workers could bring unprecedented tax dollars and activity that could strengthen not only downtown, but the entire city — if done right.
And that was what many of those closed-door sessions focused on: how to bring the growth, but for the right price, with the right benefits, without scaring off one of the largest technology companies in the world when the tech giant had a tight timeline and options to go elsewhere.
The transcripts are available due to a lawsuit by two nonprofits, Working Partnerships USA and First Amendment Coalition, which accused San Jose of violating a state open meetings law, known as the Brown Act. Those groups claim the city is withholding public information about its process with Google and a Santa Clara County Superior Court judge is currently reviewing the merits of a lawsuit that the nonprofits lobbed against the city last year.
San Jose officials, meanwhile, adamantly deny violating any state law.
Even so, the Brown Act violation claim was a critical accusation because of a 2014 resolution approved by past San Jose elected officials. The resolution said closed session meetings related to real estate negotiations should be recorded and redacted transcripts released if the city is accused of such a violation.
That means the transcriptions of the closed door meetings on the Google negotiations were available to read, but only under supervision at City Hall. The documents are not dated and the speakers not labeled with their names, only by their apparent gender. No copies can be made and no pictures can be taken — just notes jotted down while perusing the hundreds of pages of conversation that span across seven meetings.
So that’s what San José Spotlight did.
A thorough reading of the available transcripts revealed a few consistent themes in the conversations as elected officials aimed to strike a deal, setting the stage on what factors influenced the dealmaking and the various directions leaders were pulled within their communities. Among those themes:
Some leaders worried about losing Google
Google representatives were cordial to city leaders throughout the process, the transcripts show. But the Mountain View-based tech titan wanted the deal to move swiftly and company real estate leaders wanted what they considered to be a fair deal without looking like a villain in the process, according to statements in the documents.
But when conversations would steer too far toward extra community benefits or increasing the price of the land that Google was attempting to buy, one or more city leaders warned that buying land from San Jose wasn’t Google’s only option. For instance, the tech giant had purchased other properties while negotiating with San Jose leaders, including about $1 billion in land in Sunnyvale — a deal that had long been in the works but shocked many when it became official.
“They have alternatives to develop elsewhere,” one city leader said during the private meetings. “They bought a lot of pieces of land up in North San Jose already, they have bought pieces in Sunnyvale, and if we give them too much of a hard time, they’ll develop there.”
Downtown San Jose was — and still is — seeing a major uptick in interest from office developers and investors. Part of that trend started before Google made public its intent to grow in the city’s urban core, but development proposals came in faster after the announcement. That weighed on at least one councilmember.
“If they (Google) really want to be in downtown San Jose because that’s where they need to be, they just lease all those buildings and let somebody else buy the land, and they don’t have to pay a cent in community benefits or infrastructure or anything else,” the councilmember said during the meeting, noting that a downtown-wide impact fee for development would be an equitable solution.
Zoning is leverage
One question from Google critics was whether the city should be selling its land to a tech company, and potentially losing its leverage with the company, before locking in an agreement for community benefits.
That concern spilled into the closed door meetings on more than one occasion. At least one councilmember talked about community groups, including nonprofits, turning against one another over the issue of pushing Google for benefits and displacement concerns, framing it as “allies turning on allies,” due to the tension. They wondered what to say to constituents about the potential project.
But each time the subject came up, meeting attendees came back to the same conclusion: Google could opt to walk away from the deal if pushed too hard, and the city’s leverage wouldn’t evaporate entirely with the sale.
One person reminded city leaders during one meeting: “We don’t have to approve the project.”
Another person countered, “I think the votes are here. I think it’s going to go through.”
Even so, there’s no denying the land Google wanted to buy holds little value as-is, because it is primarily zoned for low-slung and industrial buildings. That’s where the city retains some leverage in the negotiations as it works to rezone the area around Diridon Station to include higher-density buildings and eventually consider a formal project by Google.
On Thursday, Aug. 22, Google is set to share its preliminary mixed-use plan for the Diridon Station Area with the city’s Station Area Advisory Group, which was convened to allow residents to share questions, concerns and neighborhood desires for the project. Google will also host a community meeting on Saturday, Aug. 24 at Arena Green West near the SAP Center.
The fire training station site was a point of anxiety
San Jose’s Fire Training Station site was a nearly constant discussion topic in the transcripts reviewed by San José Spotlight. San Jose agreed to sell the property Dec. 4 last year for $42.87 million, minus $1 million for potential clean up costs for contamination on the land. The agreement included contingencies that the city would be substantially done with construction documents for a new site within 18 months and would be completely out of the building within three years.
Now the questions are: where will the city place its new fire training station, can it create a new facility in time, and is $41 million enough to cover the cost of replacing the aging station at 255 S. Montgomery St.?
Some councilmembers worried the city would be upside down on the deal as it sought to acquire a new site, design, build and move in during the aggressive timeline. And while the answer to many of these questions remain hazy, city officials said they think the deal will be good for San Jose and for a site they’ve long anticipated would need a replacement.
As of Monday, San Jose was still analyzing locations for its new fire training station, according to a city spokesperson.
“I think that the scenario we’re in with Google, and the price they’re paying … is probably the best chance we’ve ever had in my entire career to relocate this,” one speaker said during the last meeting transcript reviewed by San José Spotlight.
Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.
Editor’s Note: The executive director of Working Partnerships USA, Derecka Mehrens, serves on San José Spotlight’s Board of Directors.