Santa Clara Council approves budget, big land sale and new condos
The Santa Clara City Council meets on June 26 for its twice-monthly meeting. Credit: Janice Bitters

Santa Clara’s City Council this week made several noteworthy decisions during its twice-monthly council meeting, including approving a new biennial budget and offering a stamp of approval on a land sale and the next phase of a condo development.

Read on for a rundown of the most newsworthy items discussed this week during the city’s nearly 3.5-hour council meeting.

The first biennial budget

Santa Clara elected officials unanimously passed the city’s first biennial budget Tuesday night.

City officials this year opted to shift to a two-year budget, meaning the Mission City adopts a spending plan for two years at a time, alternating between focusing on the city’s operating needs and its capital needs. This year’s focus is on operations. The city will prioritize a myriad of one-time expenditures and will add a slew of new positions through the life of the biennial budget, which begins July 1. Click here for a quick breakdown of this year’s budget.

A few additional interesting tidbits that were presented in the third and final budget presentation to the council Tuesday night: Salary and benefits costs are set to rise 5.1 percent in the coming fiscal year and make up 72 percent of the city’s general fund spending, according to Assistant Finance Director Kenn Lee, who presented the budget to councilmembers Tuesday night.

Santa Clara’s Convention Center will account for about $18.2 million of the city’s budget in the coming year. The city recently hired hosting and entertainment company Spectra to manage the facility after a city audit alleged potential mismanagement of funds by the Santa Clara Chamber of Commerce, which previously managed the property for more than three decades.

This year the city added two new budget items to help improve aging city infrastructure — both physical and technical.

One of those items was the public works capital projects management, which will be funded to the tune of about 3.7 million annually for the biennial budget. The second was about $13.3 million annually for information technology services to “help us plan for the future financially for improvements as we need to upgrade systems,” Lee said. That’s something city officials have acknowledged is a weak spot for the city right now.

Councilmembers unanimously praised the plan. “This is a phenomenal budget and it is a work of art,” Mayor Lisa Gillmor said.

Prometheus buys land slated for 355 residential units

Prometheus on Tuesday night got the Santa Clara City Council’s blessing to buy a set of city-owned street frontages that will help make way for its 355-unit residential development at 575 Benton St. Credit: city of Santa Clara

It wasn’t exactly a surprise that residential real estate developer Prometheus purchased a set of city-owned street frontages along Fremont and Sherman streets near 575 Benton St. from the city of Santa Clara for $9.52 million Tuesday night.

That deal was worked out last year when the city approved the San Mateo-based developer’s proposal to build 355 residential units above 650 parking spaces along with 1,600 square feet of leasing office space, a 346-square-foot pet spa, and more than 1,500 square feet of bike amenity space. A 4,340-square-foot roof deck will include a club room and fitness center in the development.

Councilmember Raj Chahal said he wasn’t sure the city was getting the best deal on the transaction because $8.6 million of the developer’s purchase price would go toward moving utilities on the site, while the city would only pocket around $920,000 from the transaction.

Other councilmembers, including Pat Mahan and Gillmor, however, said the deal was a boon for the city.

“To make this development work all of that [the utilities], would have to be replaced, either at the city’s cost or the developer’s cost,” Mahan said. “If we had a put that as a condition of approval on development, it’s quite possible, even likely, that the development wouldn’t happen.”

In the end, the council voted unanimously to follow through with the sale.

“Thank you and congratulations on your new streets,” Gillmor said with a smile. “Send us a check.”

Catalina number two

The 39-condo Catalina II development was approved Tuesday night. The project, by SCS Development, will include four Below Market Rate homes. Credit: city of Santa Clara

Santa Clara-based SCS Development got the final approval to move ahead on its proposed 39-unit condo project at 1433-1493 El Camino Real, called Catalina II. The project is basically an extension to a 54-unit project (also called Catalina) already under construction right next door.

The second phase is slated to come with new park space and four below-market rate condos that the developer estimated would sell for around $400,000 apiece — a relative steal for home ownership in the pricey Bay Area where modest homes routinely sell for more than $1 million.

The council debated whether or not to require an archeological survey before breaking ground, despite not requiring such a survey for the first phase. In the end, it agreed to let the developer move ahead under the condition that if any historical or cultural artifacts are found during construction, the developer will stop work.

“You’re a trusted development company in our city and if there is something that shows up, I know that you will do the right thing because you’ve always done the right thing for Santa Clara,” Gillmor said.

Demolition is set to start on that second phase right away.

Contact Janice Bitters at janice@sanjosespotlight.com or follow @JaniceBitters on Twitter.

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