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Council opens pathway for two Westbank mixed housing-and-data-center projects; requires housing start before full data-center operation
Summary
The council reviewed two Westbank proposals under a new Innovative Project Pathway and signaled support, with conditions including that residential construction begin before data centers operate and that staff explore dedicating a portion of future revenues to arts and cultural activation.
The San Jose City Council on April 8 used an early-review process created last year to evaluate two Westbank proposals that pair data centers with residential towers in downtown San Jose and gave staff direction to proceed with tailored approvals if the projects meet conditions endorsed by council members.
Westbank representatives described the projects as a way to finance dense housing and district energy infrastructure by pairing residential towers with data centers whose waste heat can be reused for heating and hot water. "We think housing is actually the most important thing for the AI economy," Andrew (Westbank) told the council and described district-energy examples built in Vancouver where waste heat powers nearby development.
Nut graf: Council supported advancing both project proposals through the new Innovative Project Pathway, but asked staff and the applicant to lock in public benefits: the multi-signature council memo accompanying consideration asks that residential construction begin on-site before the data center is permitted to operate, that staff explore dedicating a small percentage of future data-center revenue to arts, entertainment and cultural activation downtown, and that applicants provide robust ground-floor activation (beyond standalone public art) so the developments do not create "dead zones."
The two projects reviewed are: the Terrain site (an entitled 18-story residential tower of about 345 units where Westbank proposes converting an office/garage element into an 11-story, roughly 680,000-square-foot data center) and the Valley Title site (a previously entitled commercial/office parcel where Westbank proposes three residential towers totaling about 1,100 units with an integrated 8-floor data center of roughly 330,000 square feet). Westbank presented renderings showing activated outdoor spaces, photovoltaic facades and plans to route waste heat to adjacent residential uses.
Staff said the Innovative Project Pathway allows the council to consider project-level trade-offs where a use (data center) would not ordinarily be a downtown priority but could unlock housing, district energy and fiscal benefits. The council additionally asked staff to craft approvals and conditions so the projects deliver the housing and district-energy benefits described, and to ensure ground-floor activation, public art, community investment and workforce-development commitments are enforced in any final approvals. Several council members emphasized moving quickly to capture what they characterized as a time-limited market opportunity while protecting downtown vibrancy.
Both motions to advance the projects (and the council's multi-signature memo with the conditions) passed unanimously.
Ending: Staff will work with the applicant to define a project-specific approval path and return to council with land-use and development approvals tying the data-center elements to the housing, district energy measures and the public-benefit commitments council requested.
