San José City Council approves Greyhound condo towers

Mercury News May 24, 2017

City union leaders eye a ballot measure to force developers to hire local workers on development projects

SAN JOSE — For nearly 60 years, it was the downtown hub for intercity bus trippers, but soon it will be a pair of new high-rises that thousands of people will call home.

The City Council Tuesday unanimously approved permits and environmental studies for a project that will replace the former Greyhound Lines station at 70 S. Almaden Avenue with two residential towers. The 23- and 24-story towers will include 708 condominiums and 14,000 square feet of ground-floor retail in a project city leaders say will boost tax revenue and downtown activity.

“We look forward to the extraordinary opportunity that this project offers San José,” Mayor Sam Liccardo wrote in a memorandum co-signed by Vice Mayor Magdalena Carrasco and council members Raul Peralez and Sylvia Arenas.

Greyhound vacated the 24,427-square-foot station last May when it relocated to the Diridon transit station. The twin towers project is expected to break ground by July 2018 and be completed by 2020 in order to qualify for fee reductions under San José’s Downtown High-Rise Incentive Program.

City officials said the project will generate $15 million in city revenue for parks, $22 million for affordable housing programs and potentially $3 million in annual property taxes, substantially more than the $20,000 now paid on the land.

“We cannot overlook the many fiscal benefits that this project brings to the city,” the mayor and council members said in their memorandum. The project also won support from business groups and the San José Downtown Association.

City leaders hope the project stimulates other development — high-rise projects often carry more cost and risk, and no new ones have broken ground downtown since 2015.

The council’s approval came amid demands from dozens of unions employees that the council require KT Urban to ensure hiring of local union workers. Electrician Will Smith, 37, said he was able to buy a home in the city and that hiring local workers means they can invest in San José.

At Tuesday’s council meeting, KT Urban’s senior vice president, Mark Tersini, said local workers would have an opportunity to bid for work on the project once the general contractor is chosen.

“No general contractor has been selected,” Tersini said at the meeting. “That suggests the plumbers union will have an opportunity to work on this project. We’re open to both union and nonunion contractors on any job. … But if it’s not finance-able, they won’t be working, and that’s hundreds of jobs that will not be going forward.”

The mayor and council members noted in their memo that “the city cannot require that the investor use specific contractors or require the payment of prevailing wages.” But Tersini did agree to their request to sign an affidavit stating the project won’t use contractors or subcontractors that have a “history of wage theft violations in the past five years.”

San José labor leaders said they are considering a potential 2018 ballot measure that could force developers to hire a certain percentage of local workers on big projects.

“We have polled likely voters, and they’re very supportive of these concepts,” said union spokesman Tom Saggau.