Location

The Sale Property is located at 3500 Zanker Road between Center Street and River Oaks Parkway in San Jose. It is located in the northern part of San Jose, within an area that is surrounded by Highways 101, 880, and 237 (“Golden Triangle”). The property is bounded by industrial park uses to the north and east, with residential and agricultural uses located across the street to the west and residential directly south.

Size

The Sale Property, Santa Clara County Assessor parcel numbers 097-04-028 and 097-04-040, is approximately 81 acres, including easements and roadways along Zanker Road that total approximately 5 acres.

Title

Please see attached preliminary title report and map:

Preliminary Report – NCAL
Plotted Easements
Exception 5-10b
Exceptions 11-16
Exceptions 17-29

The Santa Clara Unified School District (“SCUSD”)

In accordance with Government Code Section 11011.1, following the posting of the notice of availability to local governmental agencies, the SCUSD notified the State in 2009 of its interest in a ±59-acre gross/±55-acre net portion of the Sale Property, and proceeded to prepare and certify an Environmental Impact Report for a K-12 school in conformance with the California Environmental Quality Act (CEQA).  On August 21, 2012 the SCUSD notified the State that the SCUSD did not have the necessary funds to purchase the property in accordance with the provisions of G.C. 11011.1. The State is now requesting offers from all private parties and individuals interested in acquiring the Sale Property in accordance with Government Code 11011.1 (c) 2.

Environmental Conditions

The most recent Phase I and Phase II analyses are contained as technical exhibits to the SCUSD EIR certified in 2012. The State does not warrant the accuracy or validity of the information contained in these or other reports provided to any Interested Party with respect to the Sale Property. Interested Parties are responsible for conducting their own analysis of the Sale Property and to determine the suitability for their intended use.

The State recently completed the removal of two underground storage tanks on the Sale Property under the direction of the County of Santa Clara.

Historic Resources

The Sale Property was formerly the home of the Agnews Developmental Center, which dates to the early 1930’s. Based on a Historic Resource Assessment (“HRA”) from 2006, a portion of the Sale Property may be eligible for State and National Registers as a potential historic district. This area, which includes the semi-circular area bounded by Cabrillo Street, Balboa Avenue, and Cortez Street, as well as the area on either side of Anza Road, contains eight structures and eight landscape features that contribute to the potential historic district. Of the eight contributing structures, four – Buildings 51, 52, 53 (the ward buildings), and 263 (the water tower) are recognized as significant resources and may be eligible for listing on the National and California Registers as individual structures. In addition, the Agnews Bell, located to the west of Building 55 outside the boundaries of the potential historic district, may be eligible for listing in the California Register. The State prepared a Re-Use Feasibility Study, which determined that renovation costs of the buildings would be significant. However, Interested Parties are not precluded from including such reuses if economically feasible. As mitigation for the loss of historic resources, the State will require that the buyer implement certain mitigation measures. Any further preservation or mitigation requirements due to the loss of the historic resource will be subject to the City of San Jose’s (“City”) entitlement process.  That process will likely necessitate the City adopting a Statement of Overriding Consideration prior to removal of any or all of the historic resources.

Existing Improvements

The Sale Property contains approximately forty-nine structures, plus assorted above and below ground construction areas of varying age and condition previously used for serving the Sale Property with utility services, circulation of pedestrians and automobiles, as well as surface parking.

Landscape

The most recent tree survey for the property is included in the SCUSD EIR, which identified 586 trees and shrubs of at least 6 feet in height and 6” in diameter that are in various conditions of health. The selected buyer should anticipate working with City of San Jose Planning staff to identify ways to preserve as many trees as possible while accomplishing project objectives.

Topography and Utilities

The Sale Property topography, as well as a summary of utilities serving the property is summarized in a memo from 2006. Interested Parties are encouraged to confirm that the information contained in the memo is accurate and remains current.

City of San Jose General Plan, Land Use Element

The City’s General Plan designates the Sale Property as Public/Quasi-Public, which reflects its former use as a State facility. Properties surrounding the Sale Property are designated as Transit Corridor Residential, Industrial Park, and Industrial Park with a Transit/Employment Residential District Overlay.

City of San Jose Zoning Ordinance

The City’s Zoning Ordinance designates the Sale Property as Industrial Park, which permits research and development, supporting commercial retail uses, manufacturing, assembly, testing, and offices. Properties surrounding the Sale Property are zoned as Industrial Park and Multi-Family Residential Planned Development. The Sale Property is within the boundaries of the City of San Jose’s North San Jose Area Development Policy (“North San Jose ADP”), which was updated most recently in February 2012. The North San Jose ADP, and its corresponding EIR, provides for the development of 26.7 million square feet of new industrial space and 32,000 new dwelling units, as well as a limited amount of large scale retail and hotel uses.

To encourage the new development, the City approved (see Item 4.2 of attached synopsis) an increase to the North San Jose Traffic Impact Fee Incentive Program to 4 million square feet and reduced such fee from $13.54 to $2 per square foot for any build-to-suit Office/R&D campus of over 1 million square feet that obtains planning and building approvals by December 31, 2014.

Private Land Use Restrictions

Cisco Systems previously acquired from the State the adjacent property to the east of the Sale Property to expand its corporate headquarters. As part of that transaction, certain deed restrictions (amended and restated February 28, 2012) were recorded regarding the permitted use of the Sale Property.

Entitlement Issues

The State submitted a Preliminary Review (“PRE”) application to the City based on varying development uses and intensities that are consistent with the jobs-creating objective of the North San Jose ADP and discussions with the City Planning Department over the last few years. The City’s response, as well as follow-up discussions with the Planning Department, advise that the development plan should maximize the use of the site by including the primary jobs-creating goal of the North San Jose ADP, as well as a rich mix of complementary land uses (e.g. Hotel) that may include public uses. The State is aware of the ongoing legislative efforts of the Santa Clara Unified School District, outside of Government Code Section 11011.1 that authorizes this RFP, to promote their interests in acquiring a portion of the Sale Property and the City of San Jose’s Resolution in support thereof. The Legislature did not pass AB 503 this session. The State is prepared to work with a selected buyer and the City in securing from the city council a general plan amendment and feasible mitigation measures that allow for the industrial and commercial uses promoted in the North San Jose ADP.