Chambers’ playbook Former Cisco CEO has seen several downturns and has a survival guide BUSINESS JOURNAL CROMWELL SCHUBARTH, 20

FOCUS: STRUCTURES EXTRA BUSINESS GROUPS A SIGNAL FOR OPTIMISM IN THE FUTURE Ahmad Thomas, the new CEO of the Silicon Valley Leadership Group, almost chose to not pursue the position left open by the departure of Carl Guardino. But one event changed his mind. JODY MEACHAM, 18

THE INTERSECTION OF WINCHESTER AND STEVENS CREEK BOULEVARDS — A VITAL AREA WHERE SAN JOSE SOCIAL CAPITAL AND SANTA CLARA MEET — GETS READY FOR ITS NEXT COMMUNITY AND EVOLUTION AS A LIVE-WORK-PLAY DESTINATION. CONNECTION 27 STORIES BY MATTHEW NIKSA AND JODY MEACHAM | 4-11

SJ construction projects 12

SILICON VALLEY Breaking news online BUSINESS JOURNAL r SiliconValleyBusinessJournal.com July 31, 2020 Vol. 38, No. 20, $5.00 Follow us on Twitter 50 W. San Fernando St. @SVBizJournal Suite 425 San Jose, CA 95113 Daily email updates L bit.ly/NewslettersSVBJ 4 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA

WINCHESTERVILLE SANTANA TERRACE Description: A three-story office building has been demolished to make way for 92 market-rate apartment units for seniors in two new four- story buildings. The project is under WEST construction. SIDE

STORY AGRIHOOD Description: The approved development includes 361 residential BY MATT NIKSA units (181 of which are designated as [email protected] below market rate), an urban farm and ground-floor retail space. Developers are seeking financing. ll but one of the iconic domed Century mov- ie theaters are gone. 1 So too is the first Bob’s Big Boy restaurant in Northern . Instead, after years of STEVENS CREEK SUBARU Aplanning and legal disputes, a new office Description: The project located development is rising across from Santa- adjacent to a Subaru dealership is na Row in . comprised of a new two-story Subaru What’s replacing these bits of San dealership and service shop with an Jose’s past is a new Class A office devel- attached three-level parking structure. It is under construction. opment rising near one of the most important intersections in Silicon Valley — that of Winchester and . This area, which the Busi- ness Journal is calling Winchesterville, is already one of the area’s top retail and restaurant destinations, and it’s growing in stature as both an office hub and res- idential center. It’s here where own- er Federal Realty Investment Trust is SANTANA WEST undertaking the biggest expansion of Description: A multiphase Class A its renowned “live-work-play” property office campus directly across from since it opened in 2002. Santana Row that could have three But amid a persistent pandemic, this office buildings offering 1 million square development — dubbed Santana West — feet of space if fully built out, plus a 1,400-space parking garage. also represents Federal Realty’s confi- dence in creating new office space “on spec.” It’s an approach the Rockville, Maryland-based firm has been bull- ish on even as some developers balk at building without committed tenants. R An aerial And with this particular project — an view looking eight-story, 375,000-square-foot office west from building called One Santana West that I-280. This broke ground exactly one year ago — Fed- area, which eral Realty has no intention to alter its starts in San design to adjust to how people will work Jose and in the wake of Covid-19. That’s because becomes the building already has enough design Santa Clara WINCHESTER RANCH flexibility to accommodate any corona- after crossing Description: An approved project virus workplace strategy. Stevens comprised of 31 buildings offering a “I don’t like the expression ‘play Creek combined total of 687 residential units defense,’ but that’s what we do a little bit Boulevard, on the site of a mobile home park. The when we design these kinds of things,” is a growing project has yet to break ground. said Seth Bland, senior vice president of center of West Coast development at Federal Real- businesses, ty. “We really can’t afford to be caught commerce flat-footed and stay alive in this business.” and residential CONTINUED ON PAGE 6 living. JULY 31, 2020 5

WESTFIELD VALLEY FAIR EXPANSION Description: The shopping center in March unveiled a 500,000-square- foot expansion in March that features CAMBRIA HOTEL new public areas and plazas, a new Bloomingdale’s and at least 11 new & SUITES SAN JOSE retailers. It now totals 2.2 million Description: An approved hotel project with square feet of retail space. up to 172 guest rooms across the street from . The 10-story project has yet to break ground.

SANTANA ROW Description: A residential and commercial district that as of July 31 offers 2.1 million square feet of retail, office, hotel and residential space, 3 including 50 shops, 30 restaurants and the 215-room Hotel Valencia.

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ADDITIONAL PROJECTS 335 SOUTH WINCHESTER PROJECT 1 Description: A five-story, nearly 95,000-square-foot project that would include four levels of office space, ground-floor retail space and one level of underground parking. An application is under San Jose planning review.

425 SOUTH WINCHESTER PROJECT 2 Description: A proposed five-story building that includes about 8,000 square feet of commercial and retail space, about 4,540 square feet of office space and 27 residential units. An application is under San Jose planning review. VOLAR Description: The 24,000-square-foot mansion 3 Description: An approved 18-story tower that calls for 307 rental residential units and up to across from Santana Row was built from 1886 49,234 square feet of commercial and office space. The project has not broken ground. to 1922 and includes 10,000 windows and 160 rooms. It is a popular tourist attraction and a historic landmark. 500 SANTANA ROW 4 Description: A six-story Class A building offering 234,500 square feet of office space, all of which is occupied by data analytics company Splunk Inc. and video conferencing company Blue Jeans Network Inc.

700 SANTANA ROW 5 Description: An eight-story Class A building at Santana Row’s west end totaling 319,000 square feet. Data analytics company Splunk Inc. agreed to lease the property’s entire office portion — 301,000 square feet — in 2018.

LOT 12 6 Description: An approved 5.5-story building offering 258 multifamily residential units at the southeast corner of Santana Row. Project is going through San Jose’s building permit approval process.

THE 111TH PHOTOGRAPHY FOR SVBJ 6 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA

look no further than its two most recent CONTINUED FROM PAGE 4 San Jose office projects for an answer. Data analytics company Splunk Inc. Case in point: One Santana West, in 2015 agreed to lease the six-sto- located at the corner of Olin Avenue ry, Class A 500 Santana Row building, and Winchester Boulevard, includes totaling 234,500 square feet, while it was floorplates in the low-50,000-square- still being constructed. In summer 2018, foot range, which “lend themselves very Splunk more than doubled its Santana well to the planning and programming Row footprint by leasing 301,000 square for today’s tenant,” Bland said. feet — the entire office portion — of the Other aspects that were designed nearby eight-story 700 Santana Row. pre-Covid-19 include three two-lane Both deals showed that Federal Realty staircases next to seven elevators, with could not only attract tenants to Santa- an opportunity to construct addition- na Row, but retain them, too. al interconnecting stairs. The developer “There are precious few office options already planned for touchless automa- like Santana West available,” Jan Sweet- tion for elevators, public access doors, nam, Western Region chief operating restroom fixtures and doors. And it also officer at Federal Realty, said in a news mapped out outdoor space with a rough- release. The monthly asking rent for ly one-acre plaza between One Santana One Santana West as of July 28 is $4.65 West and the site of the adjacent Two a square foot on a triple-net basis, mean- Santana West, a planned eight-story ing the tenant is responsible for paying Class A building whose development utilities, property expenses and building permit application is going through San services. For comparison, Splunk’s first- Jose’s project review process. year base rent at 500 Santana Row was about $3.66 a square foot a month, triple Proceeding ‘as originally planned’ net, as part of a nearly 11-year lease that One Santana West is being developed includes 3% annual bumps, according to without a tenant in tow. an SEC filing. Federal Realty and brokers Todd Shaf- STAN OLSZEWSKI FOR SILICON VALLEY BUSINESS JOURNAL If all goes according to plan for Federal fer, Tracey Solari and Randy Gabrielson O Seth Bland, senior vice president of West Coast development at Federal Realty. Realty, once One Santana West is leased of Newmark Knight Frank, which has an up, construction of Two Santana West office in Santana Row, are having con- P The domed Century 21 theater could eventually be converted into an would begin. There’s also an expansion versations with potential tenants for the “innovation hub.” The building, which was designated as a historic city opportunity totaling 300,000 square feet project, which is expected to be avail- landmark in 2014, sits on the southwest corner of the Santana West site. of office space near the corner of Olsen able for first tenant build-outs in July Drive and Maplewood Avenue that’s part 2021, Bland said. An adjacent five-story, of the overall Santana West development, 1,400-space parking garage is slated for which could stretch to up to 1 million completion then as well. It is now being square feet if completely built out. The built on the site of the now-demolished expansion opportunity is located on the Century 22 domed theaters. site of the now-demolished Century 23 “We have great faith and confidence in domed theater building directly behind not only our product that we’re deliver- the Winchester Mystery House. ing, but also in the Santana Row area, the and the Bay Area in general,” Into the ‘Innovation Zone’ Bland said. “Are times highly uncertain? All of that office space, if built, is bound Absolutely, you can’t overstate that. But to attract companies to the area, which given the trajectory, the time it takes to is why it’s notable that the Santana West bring a large new office building all the project is located in San Jose’s recently way to market, for the moment, we’re unveiled “innovation zone” — an area just proceeding exactly as originally roughly bordered by Interstates 280 and planned.” 880, West Hedding Street, Winchester As for why the real estate investment trust is moving forward on construction amid Covid-19-induced uncertainty, CONTINUED ON PAGE 8 JULY 31, 2020 7 8 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA

TRANSPORTATION CONTINUED FROM PAGE 6 Boulevard, Stevens Creek Boule- vard and Saratoga Avenue, where companies and innovators could UP AND DOWN test and pilot new products and services. Although San Jose’s two past THE BOULEVARD attempts at creating such zones failed to gain traction, city officials are hopeful about a third effort. “If they have really excit- ing technology that they want BY JODY MEACHAM to pilot or do trials for, they can [email protected] do those in that innovation zone, right where they have their office ther than the downtown remake set up,” said San Jose Vice Mayor promised by Google’s Diridon Chappie Jones, referring to how a OStation area development, there’s no other part of San Jose where company could benefit from One a confluence of development and new Santana West’s presence. transportation infrastructure will do as LMAZZOCHI / GETTY / IMAGES LMAZZOCHI Jones, who represents one of much transformation of what we see two City Council districts that today as the Stevens Creek Boulevard cover the area, said the intent of corridor and its intersection with Winchester Boulevard. launching the zone was not nec- A revamped Winchester-280 5 WAYS PEOPLE MIGHT TRAVEL ON STEVENS CREEK BLVD. essarily to attract tech companies. interchange is on the drawing board, Instead, it was to see if innovation and new bicycle routes, a pedestrian and technology could improve the Last December, the city of San Jose revealed the 23 transportation submissions it had overcrossing and a redesigned quality of life in what is a high- intersection of Santana Row and Stevens received to create a next-generation plan to get people from Cupertino to downtown Creek are in the works. The timeline for San Jose and then to Mineta San Jose International Airport. In all of the plans, Stevens ly dense area that, besides the completion of most of this is 2026. Creek Boulevard and its transition to West San Carlos Street become a major a transit mixed-use Santana Row, includes In addition, some sort of new mass thoroughfare. the Westfield Valley Fair mall. transit is being studied from De Anza Those 23 ideas got narrowed to five in June. San Jose’s transportation department The innovation zone project, is expected to recommend pursuing this research further to the City Council at some College along Stevens Creek to Diridon which counts Federal Realty as a Station in downtown and on to Mineta San point in August. Here the five finalists: Jose International Airport. collaborator, also includes a pro- “There is just an immense amount of Monorail: BYD is a Chinese company with posal to convert the domed Cen- growth either already happening or close subsidiary BYD North America based in tury 21 theater building on the at hand [in the area] and there isn’t really Los Angeles. It has an operating SkyRail southwest corner of the Santana system in Shenzen and Yinchuan and has enough space in this corridor to add West site into a so-called “innova- more auto capacity,” said Ramses Madou, four systems under construction in China division manager for planning in the city’s and Brazil. The company says its driverless tion hub.” For years, Federal Real- transportation department. monorails can operate at 75 miles per hour ty has been trying to decide what Some of this is driven by the 2017 legal on headways as close as 90 seconds apart to do with the property, which was settlement between San Jose and Santa in trains ranging from two to eight cars. designated as a historic city land- Clara, who share Stevens Creek Boulevard mark in 2014 and therefore can’t as their municipal border for 3.2 miles. Fixed guideway: 2getthere, based in be significantly altered. The settlement guaranteed that billions Utrecht, the Netherlands, proposes a system in development that Santa Clara doesn’t of automated, 22-passenger vehicles that Jones envisions the innovation like could proceed, but San Jose would run on a fixed guideway, either elevated, in hub as a public-private partner- have to do $6.3 million worth of traffic tunnels or at grade. It has built such systems ship in which Federal Realty would improvements in Santa Clara. at places like Amsterdam’s Schiphol Airport, seismically retrofit a portion of the Now those two cities plus Cupertino, which opened in 1916. The vehicles travel at building to turn it into rentable where Stevens Creek ends at De Anza 25 miles per hour on headways as short as College, are working on the political and 10 seconds apart. incubator space, while the pub- planning aspects for running mass transit lic would host STEM camps and down a corridor that’s already jammed On-demand tram: Jalisco, Mexico-based worker retraining programs in a with cars. They’re not looking at light rail ModuTram says its Autotrén concept is in separate part of the property. Proj- but something — perhaps a mode still in pre-production testing in Guadalajara. It ect plans are still in the conceptual the development stage — that would be operates four hours daily and accumulated phase, he said, adding that sever- much cheaper but also faster than driving. more than 40,000 miles of travel. Up to “I think there are some clear candidates eight passengers per self-driving vehicle al different funding sources would that we could implement a project for in travel on demand individually or coupled in be required for it. the coming less-than-a-decade down the trains on an elevated guideway. “I think that’s a perfect loca- corridor using proven technologies,” said Adam Dankberg, an engineer with Kimley- tion, it would be in the heart of Horn and Associates, who has studied the the innovation zone,” Jones said, Self-driving cars: In Los Angeles-based 23 possible solutions submitted last year Plenary’s system, passengers would board referring to the hub. “To me, it’s a to San Jose at the request of Mayor Sam small self-driving vehicles that would take no-brainer.” Liccardo. ramps to trunk lanes that are about the The five with the most potential are width of a bicycle lane on the street. There battery-powered and use dedicated would be two lanes in each direction. The guideways so that they don’t have to share trunk lanes could be side-by-side or stacked lanes with city traffic. They range from a and would be covered with roofs made of Chinese-manufactured driverless monorail solar panels that power recharging stations. that is under construction in four cities, including one in Brazil, to autonomous Teslas speeding through tunnels dug by Teslas in tubes: The Boring Company’s idea Elon Musk’s Boring Company. to use self-driving Teslas in tunnels is also “Obviously, a lot of the costs associated on the table. Although specific details are with transit are just general construction lacking, especially around projected cost costs,” Dankberg said. “The guideway you savings from tunneling, Elon Musk maintains AGRIHOOD>> can’t avoid, but you can still dramatically he can dig faster and cheaper than anyone lower the cost by just having way less of else. The company created a test tunnel A rural respite is looking to sprout a systems component because you don’t in Hawthorne, California, to show how the near the San Jose-Santa Clara need that additional electrified conduit.” concept can work. border. PAGE 10

10 SILICON VALLEY BUSINESS JOURNAL FOCUS: STRUCTURES EXTRA

COMMUNITY INFLUENCE NOT YOUR TYPICAL HOME ON A FARM BY MATTHEW NIKSA [email protected]

magine for a moment, tomatoes, strawberries and zucchini growing from the ground across the street from Westfield Valley Fair. Cars zip along a busy Winchester Bou- levard as residents tend to gardens steps away from their apartments Ior townhomes. This is the concept behind “Agrihood,” a mixed-use, mixed-income project from The Core Companies that was initial- ly outlined about five years ago, but has been envisioned in some form or anoth- er by community members since 2003. It would rise on vacant land that was for- merly a U.C. Davis test farm. The project would offer 361 housing units to the types of people that argu- ably need it the most: seniors and vet- erans living on extremely low incomes, first-time homebuyers and middle-in- come households. It also includes about STEINBERG HART an acre of urban agricultural space that The Core Companies’ Agrihood project in Santa Clara includes about an acre of urban agricultural space that the developer its developer estimates would produce estimates would produce up to 9,000 pounds of produce annually. up to 9,000 pounds of produce annual- ly, as well as retail space. first quarter of 2021 — about four years “Because of Valley Fair’s and Santana But there’s one big caveat — Agri- after its developers reportedly first want- Row’s attraction, you’re going to draw hood, short for “agricultural neighbor- ed to start building. He declined to dis- upwards of 70,000 to 100,000 people a hood,” won’t break ground unless San close what Agrihood’s estimated total day to the area, in general, who can walk Jose-based Core Cos. is awarded tax cost is or the amount of tax credit and over and enjoy what’s happening at the credits and bond funding from two state bond funding it applied for. Agrihood,” said Kirk Vartan, founder agencies. The project has already received a con- and general manager of A Slice of New If that doesn’t happen, the project’s ditional commitment of $23.55 million in York, a pizza shop headquartered in groundbreaking would be delayed by Measure A funding, which comes from Santa Clara with a second location in at least two quarters, which isn’t a new Santa Clara County’s $950 million afford- Sunnyvale. twist for Agrihood. It was initially slat- able housing bond approved in 2016. “I think it’s going to be a region- ed to break ground in 2017, but that was A development agreement between al draw that’s going to be talked about delayed six months so that Core and the Core and the city of Santa Clara also says and, hopefully, replicated for decades,” nonprofit Project for Public Spaces could that it will pay the city about $15.7 mil- he said, referring to the project. Vartan rethink the project’s layout. NICOLE DEVELBISS lion for the land under Agrihood’s 160 is also the co-founder of Catalyze SV, a The company submitted funding Vince Cantore, vice president of planned mixed-income apartments and nonprofit that advocates for community applications in June to the California development at The Core Companies. 36 townhomes. The city would then engagement in development. Debt Limit Allocation Committee, which immediately loan that amount back to Agrihood arguably would not have issues tax-exempt bonds for affordable Core to help it pay for the construction been possible if it weren’t for the efforts housing developments, and the Califor- of 165 affordable senior apartments. of him and a coalition of South Bay resi- nia Tax Credit Allocation Committee, Santa Clara and Core are aiming to dents who fought to keep the agricultur- which awards federal and state tax cred- close on the sale-and-loan agreement al history of the project site intact. The its to affordable rental housing develop- later this year or early next year, contin- development is located on a former Uni- ers, both three months later than origi- gent on Core’s tax credit funding applica- versity of California agricultural research nally planned. tions receiving approval, Andrew Crab- and development station called the Bay “With the impact of the (Covid-19) tree, the city’s director of community Area Research and Extension Center, or pandemic, the state agencies had to development, stated in an email. BAREC. adopt emergency regulations for how When the city of Santa Clara pur- they process applications and evaluate How the community chased a six-acre portion of the 17-acre applications for housing projects,” said changed this neighborhood BAREC site for $11.5 million in 2005, Vince Cantore, vice president of devel- While Agrihood’s groundbreaking date it was required to include at least 165 opment at Core. is uncertain, community members and low-income senior homes on the site as If Core is awarded the tax credit and STAN OLSZEWSKI Santa Clara city officials are calling it a part of the terms of the sale. But over the bond funding, Cantore said it plans to Kirk Vartan, founder and general “game-changer” and “placemaking at following 10 years, redevelopment plans break ground on Agrihood during the manager of A Slice of New York. its best.” stalled out due to the Great Recession JULY 31, 2020 11

and the dissolution of state redevelop- Agrihood’s ment agencies that provided affordable residential housing funds. portion has When Santa Clara put out a request three parts: one for proposals for the BAREC land in 2015, building with Vartan, Bay Area architects and a non- 165 below- profit land-use consultant called the Cal- market-rate ifornia Native Garden Foundation teamed units for seniors up to work with Core Cos. on its devel- and veterans; a opment bid. The Santa Clara City Council second building selected it in September 2015. offering 160 The next year, California lawmakers mixed-income passed a measure allowing Santa Clara apartments; and to remove certain housing requirements a development for the BAREC site and eliminate a man- with 36 market- date that Core begin construction by Jan. rate townhomes. 5, 2017. The developer then worked with Project for Public Spaces to add a com- munity kitchen and cafe to the project’s STEINBERG HART design and have most of its agricultural open space abut Winchester Boulevard, to host 52 onsite events every year that said the city has a “tremendous need” ing applications in September. If the among other design changes. The devel- would be open to the public. for affordable senior housing that Agri- project isn’t awarded funding then, he oper submitted its redesign in January Santa Clara Mayor Lisa Gillmor was hood addresses: “The fact that this prop- said Core would do “everything possible” 2018. still a City Council member when the erty has that component is huge,” Gill- to reapply for funding by the end of Sep- If completed, the project would offer city was reviewing development bids mor said. tember for funding awards announced in amenities such as an event plaza, a cafe, for the BAREC site. She remembers She added that another key aspect of December. 5,000 square feet of retail space, and a Core’s initial proposal offered the most the project is its location within walk- “I couldn’t be more ecstatic to be at paseo that runs between the mixed-in- forward-thinking vision of the proper- ing distance of grocery stores, drugstores the point that we’re at,” he said. “We’re come and senior apartment buildings ty compared to other ideas: “The most and transit, making it conveniently looking to break ground on the project that can include up to 20,000 square feet interesting and fun community-based located for the city’s aging baby boomer in the first quarter of 2021. And assum- of pop-up retail space. project that I had ever seen,” Gillmor population. ing everything lines up on the financ- As part of its approval of Agrihood, the recalls. Cantore expects to receive the out- ing side, that’s what we’re planning to City Council also called for the project The fourth-generation Santa Claran come of Core’s tax credit and bond fund- execute on.”

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