Parks Letter on High-Rise Residential Incentives

August 16, 2006

Helen Chapman, Chair
Parks and Recreation Commission
City of San Jose
200 E. Santa Clara Street
San Jose, CA 95113

Re: Downtown High Rise Residential Incentives

Dear Helen,

The San Jose Downtown Association values and appreciates all the public support to date to encourage high rise housing in downtown, particularly the understanding of how denser housing in the core will positively influence retail, safety and vibrancy.  We appreciate the Parks and Recreation Commission’s openness to consider our goals and objectives for a better downtown.

The Association acknowledges the good work of the Commission and the Parks, Recreation and Neighborhood Services staff in proposing additional “active elements” under the private recreational credits to assist downtown core developments satisfy up to 50 percent of their parkland obligation.  However, the credits for “private recreational amenities” are cumbersome to define, administer and calculate.  Furthermore, in applying the proposed credits to several downtown high rise projects currently under development, the projects do not come anywhere close to gaining the allowable credit.

The staff proposal is to raise downtown multi-family fees per unit from $10,500 to $15,200 per unit in 2007 and $17,850 in 2008, respectively a 45% and 70 % increase over 2006 rates.  The market downtown is far from assured, and the recent news that Hanover Co. halted their Marshall Squares project is a reminder the road forward for high rise housing will have its bumps.

The Downtown Association recommends a straight 50 percent reduction of park fees per unit for downtown high-rise projects.  The incentive should expire when 2,500 new downtown high-rise units achieve their Certificate of Occupancy (COO) starting from the date the incentive is approved.  (For instance, there are currently 1,486 high-rise units under development today that haven’t reached COO stage).  This proposed fee reduction incentive would apply only to high-rise projects of 10 stories or more located in the downtown core (approximate boundaries:  Highway 280 on south; 7th Street on east; Julian Street on north and Highway 87/Caltrain tracks/Stockton Avenue on west).  Furthermore, we recommend that the downtown high-rise park fees should be payable to the City of San Jose in increments:  half upon building permit approval and remainder at COO (rather than all up front).

We look forward to discussing these recommendations with you soon in greater detail.

Sincerely,

Henry Cord
President of the Board

cc: SJDA Executive Committee members
Scott Knies