Caltrain considering commercial proposal near San Jose station

“We are also able to begin to pursue this development work in part because of the work we have done with our partners in the city of San Jose, with VTA, high-speed rail and MTC around this program and [having] enough of a sense of what that future station could look like and what property may be needed to support it,” Petty said.

The concept design calls for two office buildings with ground-floor retail and a large plaza area between the two buildings. According to a Caltrain staff report, the project connects to the front of Diridon Station on Cahill Street in San Jose. Initial parking estimates suggest 710 underground vehicle parking spaces. There would be 290 long-term bike spaces and 40 short-term ones. The ground floor would be an estimated 31,300 gross square feet, with the office at 1,112,700 square feet. Caltrain has hired ARUP and Perkins and Will to design a commercial development, the staff report said.

The development parcels are immediately east of the Diridon Station and are bordered by South Montgomery Street, Cahill Street, Crandall Street and West San Fernando Street. The site currently is Caltrain parking.

San Jose recently amended its Diridon Station Area Plan, a land-use plan for 200 acres around the station that increases development capacity and allows for market-rate housing, affordable housing, hotel rooms and commercial space. The staff report said that the Peninsula Corridor Joint Powers Board, which operates Caltrain, owns 3 acres eligible for commercial uses and 6 acres total. Development of housing is prohibited on Caltrain’s parcel. Despite the capacity increase, there are still limits on overall development under the area plan. The limits have motivated Caltrain to move ahead with planning entitlements to ensure it is part of the increased allocation before limits are reached.

Brian Fitzpatrick. director of real estate and property development with the San Mateo County Transit District, discussed the development at an Aug. 25 Caltrain committee meeting. He called the 3 acres a pure development site.

“We want to make sure on this site that we integrate with the future station, future rail expansion, current station, and we want to make sure that we provide access connectivity, pedestrian plazas and other things,” Fitzpatrick said.

The transit agency said the development could result in substantial, long-term revenue. Caltrain spokesperson Dan Lieberman said by email the funding would support its operating needs. However, given the early proposal stage, it was too soon to tell what kind of revenue numbers to expect. It faces a deficit in its preliminary 2022 budget and is experiencing revenue decline due to the pandemic.

Caltrain plans to submit a preliminary application to the city of San Jose in September 2021, with an overall review time expected to be about six to eight weeks. Following the preliminary review process, it will incorporate feedback and submit an application. The formal review will take a year and includes community outreach and an environmental assessment. Review and approval are required by the San Jose Planning Commission.

Caltrain expects to enter into a long-term ground lease with a private developer responsible for financial and building issues.

curtis@smdailyjournal.com

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