A failed housing development in San Jose could be transformed into a tech research and development hub under a new plan filed with city planners.
Arena Limited, an affiliate of New York City-based Arena Investors, submitted a proposal to turn 199 Bassett Street in downtown San Jose into an AI-focused tech complex, The Mercury News reported.
The site was previously planned for a co-living housing project that would have brought 803 affordable units to the area. The endeavor fell through when former owner and developer Starcity defaulted on a $14.7 million loan in 2021; the collateral for the loan was the 199 Bassett Street site.
Lender and subsequent owner Arena Limited then seized the property through foreclosure in 2022. The site, currently consisting of two vacant low-rise industrial buildings, has been untouched ever since.
Bay Area real estate executive Dennis Randall, co-founder of Insight Realty Company and Acquity Realty, is representing Arena to move the proposal through the San Jose government planning process.
The 281,000-square-foot, eight-story structure would have two lobbies on the ground floor as well as 2,800 square feet of retail.
Plans for the development indicate it would function as a data center to power artificial intelligence. The basement and first floor would feature a power substation, the second and third floors would contain generators, floors four through seven would contain computers — referred to in the proposal as “AI R&D” sites — and the top floor would have a cooling water plant.
Housing hasn’t been completely eliminated from the equation either. The developers pledged to build housing elsewhere in the area. “The project will also construct 400 units of housing in downtown San Jose on a separate site,” planning documents said, per the Mercury News.
Meanwhile, developer BXP is doing the opposite with its own San Jose plans. The firm planned a massive tech campus 2830 North First Street and 45-65 East Plumeria Drive and is now pivoting, turning part of the development into nearly 500 apartments.
San Jose needs all the help it can get in reaching its housing goals. The city’s Regional Housing Needs Allocation requires 62,200 new housing units by 2031, or an average of 7,775 new units each year.
— Chris Malone Méndez
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