Santa Clara approves affordable for-sale homes, electricity deal for ‘Related’ project
The Santa Clara City Council is pictured in this file photo. Photo by Janice Bitters.

    Santa Clara leaders Tuesday night approved agreements that will bring four new affordable condos to the city, endorsed a revamped recycling contract for residents and pushed forward plans for a new power substation to serve the city’s most anticipated development.

    The Related Cos. is building a 9.2 million-square-foot, mixed-use project near Levi’s Stadium. Image courtesy of city of Santa Clara

    As the 9.2 million-square-foot Related Santa Clara mixed-use project begins to rise, officials are making moves to ensure the 240-acre development — along with other developments in the area — will have the electricity needed in the long-term.

    The Related Cos. is building a mixed-use project near the Santa Clara Convention Center and Levi’s Stadium that will be built in phases over the coming decades, but the additional power substation is a “Key component” of the project, according to Manuel Pineda, the city’s assistant city manager.

    On Tuesday, city leaders approved an agreement for a new $21 million power substation, called Esperanca Substation, that will serve the development site at 5155 Stars and Stripes Drive and open in 2022.

    The upshot of the deal is Related Cos., the developer behind the massive project, will pay for more than 40 percent of it, though it will be owned and operated by Silicon Valley Power, the city’s electric utility. The rest of the project costs will be covered by SVP’s capital fund. The substation will generate power for other properties in addition to Related’s development.

    The approximate location of the new Esperanca substation in Santa Clara. Image courtesy of city of Santa Clara

    “Its a big benefit, it’s a key component of the Related Santa Clara development, and in addition to that, it allows for additional load growth north of Bayshore,” Pineda told councilmembers Tuesday.

    Silicon Valley Power has long envisioned adding more capacity in the area to accommodate growth around Levi’s Stadium. The city and Related agreed on the new substation in 2016, when the mammoth project, then called City Place, was approved. In all, Related will reimburse the city about $9.7 million of the substation project.

    In the meantime, SVP is working on plans to add three more substations around the city in the coming years as the city gears up for commercial and residential growth.

    The approval Tuesday comes a month after the city approved adding a slew of new contractors and staff positions dedicated to pushing forward the project, one of the largest developments in Silicon Valley.

    “Affordable” condos coming 

    As the region grapples with sky-high home costs, Santa Clara officials have worked out an agreement that will bring four new for-sale condos to the city at “affordable” rates.

    The 39-condo Catalina II development was approved in June. The project, by SCS Development, will include four Below Market Rate homes. Photo courtesy of city of Santa Clara.

    SCS Development got the green light for its 39-condo Catalina II development at 1433-1493 El Camino Real in June, but an agreement to sell some below-market-rate homes was a condition of that approval.

    Following the unanimous vote Tuesday night, SCS Development will sell four of its three-bedroom, three-bathroom condos at rates affordable to people making between 90 percent and 110 percent of the area median income, or meaning they’d sell for between $388,000 and $472,000. That’s a steal in the region, where home prices regularly surpass $1 million in cost.

    The deal comes with some conditions for the lucky buyers for the first 20 years of ownership, however.

    If a buyer sells the home within the first five years, they’ll be required to sell it at the same affordability level they purchased it. After five years of ownership they’ll share the appreciation of the home with the city when they sell. After 20 years, the home will become a regular market-rate home, according to city documents.

    The project is basically an extension to SCS Development’s 54-unit project (also called Catalina) already under construction right next door. Catalina II will come with new park space, attached two-car garages and visitor parking spaces. Seven of the homes will be live/work units, which is a single unit consisting of both office and residential space.

    Recycling rates rise 

    City officials Tuesday also agreed to move forward with a 15-year revamped agreement with recycler Recology, which has been serving city residents since 2008.

    This chart shows the anticipated rate increases for recycling in Santa Clara in the coming years. Image courtesy of city of Santa Clara

    The new agreement dictates residents will keep their current recycling services, using the same containers as always. But Recology will be required to buy new renewable diesel trucks that would be on the road by July 1, 2021. The city — and therefore residents — will see three rate increases totaling nearly $2 a month combined over the next three years. The agreement doesn’t include garbage pickup.

    Currently, residents serviced by Recology under the existing contract pay $4.54 per month for pickup. By July 2022, that would rise to $6.34 monthly. The agreement would also come with a host of poor service penalties for the recycling pickup provider, including fines for not responding to complaints courteously or quickly, missing pickups or not placing containers out of the way of traffic.

    A graph comparing recycing contract rates around the South Bay. Image courtesy of city of Santa Clara

    “We believe this is a very good value for the city,” David Staub, deputy director of public works, told councilmembers Thursday night. “The estimated rate increases were predictable and unavoidable.”

    Santa Clara officials say the new rates are fair because of increases in the cost of doing business in the solid waste industry over the past decade that haven’t been reflected in the existing recycling contract with Recology. Officials also add that residents are still getting a good deal compared to other cities, noting that neighboring San Jose’s recent contract shakes out to a higher cost per household.

    Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.

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