San Jose City Council Approves Continued Tax Breaks for Developers

Jan 19, 2017 | Blog

construction of commercial buildingDuring the final city council meeting of 2016, dozens of new measures impacting San Jose residents were approved. The San Jose City Council is set to reconvene in January with new council members Sergio Jimenez, Lan Diep, Dev Davis and Sylvia Arenas after saying goodbye to outgoing Vice Mayor Rose Herrera and Councilmen Pierluigi Oliverio and Manh Nguyen.

During the meeting, the council voted unanimously to continue to allow tax incentives for high-rise apartment developers in the downtown San Jose area. As long as projects break ground by July 2018 and are completed by December 2020, the incentive would slash construction-related fees and taxes in half. After dozens of union trade laborers criticized the city for giving developers tax breaks without demanding that they hire local workers, the council agreed to report back on a decision to create a “local hire policy” by June 2017.

Labor leaders also convinced the San Jose City Council to consider requiring community workforce agreements for future public construction projects. As a tax attorney in San Jose I know that these agreements are already required by the county, and are similar to the idea of a local hire policy. Labor leaders claim that the agreements would guarantee that local workers get hired first and would receive fair wages and benefits.

The next order of business was a vote to rezone 40 acres in Alviso to allow for a Topgolf venue, which aims to create at least 600 local jobs and millions of dollars in potential revenue. The 72,000 square foot entertainment facility will feature golf activities, music and bars with an attached 200-room hotel and over 110,000 square feet of retail space. Two council members opposed the development while referencing concerns that the noise would disrupt the neighboring community and the increased traffic would negatively impact the small-town appeal of Alviso.

Another controversial deal  approved during the council meeting is a land-use change that allows developer Republic Urban Properties to build a retail complex on 27 open acres of land owned by the local Evergreen College. Local residents criticized the decision, and said since Evergreen College lags behind other schools the land should be used for educational purposes that would benefit students.

Less controversial topics were also settled during the meeting, as city leaders unanimously extended a shelter crisis for the second year and voted to open four warming centers for the homeless this winter. The shelters open when it’s 42 degrees or less and raining or 38 degrees without rain from November to March. The council also approved the use of “supergraphics” in downtown and North San Jose. The large wall signs attach to high-rise buildings and will require permits to be displayed. City leaders said the banners will support businesses and the cultural vibrancy of San Jose.

As a tax attorney in San Jose, I’m interested to see how these new developments will affect residents of neighboring cities like Milpitas and Sunnyvale, as well as any potential tax increases. For now, I and many other San Jose residents will look forward to more news of how the projects are developing.

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