SAN JOSE — PG&E, a big developer and top San Jose officials are eyeing eco-friendly housing towers and data centers to help pave pathways of innovation that can create a green energy downtown.
Westbank, a mega-developer with a global reach, has begun floating proposals with San Jose planners to build projects that feature housing towers and data centers that would work in tandem to produce eco-friendly energy for the residential highrises that could sprout in the city’s downtown.
Street-level view of a 345-unit housing tower at 323 Terraine Street in downtown San Jose, concept. (Studio Gang)
These ambitious proposals have emerged at a time when PG&E is making multiple pitches to tech companies and other businesses regarding ways the utility behemoth can spur production and delivery of additional and reliable sources of energy to bolster the Silicon Valley economy.
The notion of placing housing next to data centers that can create energy as well as tech information hubs is emerging as one of the components of the grand strategy for an eco-friendly downtown San Jose and Silicon Valley, which are both poised to consume a lot more electricity.
Residential development consisting of three 30-story housing high-rises at 300 South First St. and 345 South Second St. in downtown San Jose, concept. (Steinberg Hart)
“When all is said and done, our housing portfolio in downtown San Jose will include over 4,000 residential units,” Andrew Jacobson, vice president of the U.S. for Westbank, said in an interview with this news organization.
At least two of these projects will include a stand-alone data center that would rise next to the residential buildings and supply the homes with excess heat from the tech hub that would otherwise be vented to the atmosphere.
“Our focus is very much going to be on the production of residential buildings and housing units in downtown San Jose, and focusing heavily on the sustainability of those units,” Jacobson said.
San Jose is pushing ahead with what the city calls an “Innovative Project Pathway Program” that makes it easier for projects to be built downtown, even if the proposed development doesn’t quite conform to the zoning for a location, according to San Jose Mayor Matt Mahan.
“We launched the Innovative Project Pathway Program to encourage the market to pitch us with viable projects that will enhance the quality of life in San Jose and improve community benefits,” Mayor Mahan said in an interview with this news organization.
San Jose’s innovative development program is designed to encourage creative high-density mixed-use housing, office, retail and entertainment projects. In this case, the creative twist is a data center to improve the green energy aspects of the adjacent housing.
“Westbank’s proposal is exciting because it tackles two of our biggest challenges in the same project, housing and energy conservation,” Mahan said. “This can be a net zero energy project through the computing power in the data center, then capturing excess heat to use it to heat the neighboring high-rise developments.”
Here are the downtown San Jose projects where data centers could sprout next to Westbank-built housing towers:
— Orchard Residential on a property known as the Valley Title site. Westbank’s current proposal envisions three housing towers, each 30 stories high, that together would produce 1,147 residential units in downtown San Jose’s trendy SoFA district. The addresses are 300 South First Street and 345 South Second Street, with an additional frontage on East San Carlos Street.
— Terraine, a 17-story highrise with 345 apartments at 323 Terraine Street.
“We are the first big city in the country to pledge to be carbon neutral by 2030,” Mahan said. “We are innovative pioneers.”
By happenstance, PG&E is hosting an event titled “PG&E Innovation Summit 2024” in downtown San Jose. PG&E Chief Executive Officer Patricia Poppe, Mayor Mahan and multiple PG&E executives are among the speakers at the day-long gathering.
How do data centers fit into this? Data centers require plenty a lot of electricity to operate and use cooling towers to keep equipment and electronics from overheating. Excess heat is often vented into the air and wasted.
Experts are eyeing ways to use the excess heat from the data center process.
“An underutilized option is to reuse waste heat for heating other facilities,” stated a post on the Heat Exchanger website.
This is the approach Westbank is considering for the Terraine and Orchard Residential housing towers in downtown San Jose.
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“Our long-term vision is with multiple data centers and housing clusters, the idea is to connect them all together and create a downtown San Jose district energy system,” Westbank executive Jacobson said. “If we can capture low-cost, low-carbon energy, that creates a huge opportunity downtown.”
Canada-based Westbank has proposed several projects in downtown San Jose, a vision that originally emphasized office towers more than housing.
The fevered demand for housing coupled with the collapse of the office market undermined by fading tech industry demand for workspaces prompted Westbank to pivot towards residential towers on sites where it had previously proposed office highrises.
“What we need is a thriving downtown in San Jose,” Jacobson said. “San Jose has a great downtown. All that is missing is to have more people living downtown, and living here at scale. We want to drive the construction of housing. We want to do more than start just one project. We want to get many housing projects started.”
The data centers, in synergy with adjacent housing, would make Westbank’s downtown San Jose projects in more energy efficient — and more attractive bets to land construction financing.
“We have a lot of conviction about downtown San Jose,” Jacobson said. “It has great bones, with fantastic restaurants and bars and places for entertainment. What downtown San Jose is missing is housing at scale.”
