San Jose Sharks reach last-minute settlement over Google’s downtown development

In a sudden about-face, the San Jose Sharks — the most vocal opponent of Google’s plans to build an 80-acre urban village and tech campus on the western edge of downtown — have backed down.

Just hours before the San Jose City Council is expected to grant Google final approval for its monumental development plan, San Jose Director of Economic Development Nanci Klein announced in a memo that the city, Google and the San Jose Sharks have reached a settlement agreement.

“The settlement agreement among the city, Google, and SSE (Sharks Sports & Entertainment) resolves the vast majority of concerns raised by the parties,” she wrote.

Referred to as Downtown West, Google plans to build up to 7.3 million square feet of office space, 4,000 housing units, 300 hotel rooms, 500,000 square feet of retail space and 15 acres of open space and parks just west of downtown San Jose surrounding the Diridon train station and SAP Center.

On top of Google’s plans, the Diridon Station Area Plan, which is guiding development for the broader 250 acres surround the train station, calls for the addition of up to 6.4 million square feet of office space, 7,000 housing units and 536,000 square feet of retail.

Since the city’s planning commission unanimously recommended approval of Google’s Downtown West project on April 28, Google and the city have made a handful of modifications to the project approvals to address the Sharks concerns over parking, according to city officials.

Those modifications include a written stipulation in the zoning ordinance allowing the Sharks to continue using three major on-site parking lots during the project’s construction and a guarantee that the city and Google will consult with the Sharks about the schematic design of parking facilities to ensure that at least 2,850 parking spaces will remain within 1/3-mile of the south entrance of the SAP Center. The city has also agreed to help pay any cost increases incurred for SAP Center event-related transportation and parking management program fees — including off-site traffic control services — that exceed 2019 costs.

In exchange for such modifications, the Sharks have agreed not to sue the city or Google.

“The city and google absolutely hear the Sharks’ critical need for efficient access and have worked to incorporate many of Sharks Sports & Entertainment concerns,” Jessica Zenk, San Jose deputy transportation director said during the city council meeting Tuesday.

The settlement agreement marks a stark reversal from the tune struck by the Sharks over the past several months.

The Sharks began lodging public complaints about Google’s project in November 2020, saying that the development plans around the SAP Center would force them out of San Jose and that city leaders were not giving their concerns proper consideration.

San Jose owns the SAP Center and leases it to Sharks Sports and Entertainment to operate and maintain. An agreement between the two parties, which is supposed to last until 2040, outlines the city’s roles and responsibilities pertaining to the arena, including maintaining a certain number of parking spaces for events there.

City officials, Google representatives and Sharks executives have met more than 75 times since 2019 to address issues raised by the sport and entertainment company. But up until Tuesday, the Sharks were not content with what had come from those discussions.

Klein wrote in her memo that while the revisions to the project’s approval process resolved the “bulk of the issues,” not every issue raised by each party could be addressed in the agreement. To address ongoing concerns and those that may arise in the future, Google, the city and the Sharks have agreed to “meet and confer in good faith to find amenable resolutions to both outstanding and forthcoming issues.”

The settlement agreement will have to be approved by the city council later tonight, when it also approves Google’s Downtown West project and the broader Diridon Station Area Plan.

“We firmly believe that the sharks will be able to succeed and in fact thrive with the proposed project as its neighbor, particularly given all the new people and access brought to live by this project,” Jessica Zenk, San Jose deputy transportation director said during the city council meeting Tuesday.