SAN JOSE — An ambitious and massive effort to produce thousands of green homes alongside data centers in downtown San Jose, with key support from PG&E, is slated to launch in 2025.
Global developer Westbank, utility titan PG&E and the city of San Jose have allied to speed the development of eco-friendly housing towers whose energy would be powered by surplus heat from nearby data centers.
Balconies and apartments in a 345-unit housing tower at 323 Terraine Street in downtown San Jose, concept. (Studio Gang)
“Our first ground-up housing development will be in 2025,” said Andrew Jacobson, vice president of the U.S. for Westbank.
Around the same time one or more housing projects break ground as brand-new developments in downtown San Jose, Westbank will launch the construction of data centers to help provide energy for adjacent residential units.
Bank of Italy historic tower at 12 South First Street in downtown San Jose, November 2023. (George Avalos/Bay Area News Group)
Separate from the new housing towers, Westbank is also working on a significant redevelopment project, the Bank of Italy historic tower, that could begin within weeks or months.
Westbank aims to convert the Bank of Italy office highrise at 12 South First Street into a residential tower, according to Jacobson.
“The Bank of Italy will start in early 2025,” Jacobson said.
Canada-based Westbank believes that developing housing next to data centers could be a huge catalyst for environmentally friendly housing projects by using excess heat from a data center to provide energy to nearby homes.
Ian Gillespie, chief executive officer and founder of global development firm Westbank, speaks during a PG&E Innovation Summit in downtown San Jose, Nov. 13, 2024. (George Avalos/Bay Area News Group)
“You could have an entire downtown powered by data centers,” Ian Gillespie, Westbank’s chief executive officer and founder, said on Nov. 13 when the initiative to build green housing powered by data centers was announced.
At least two of Westbank’s housing projects will include a stand-alone data center that would rise next to the residential buildings and supply the homes with the tech facility’s excess heat that would otherwise be vented to the atmosphere.
“We aim to capture the heat, provide it to housing nearby and ultimately connect it to a district energy system in downtown San Jose,” Jacobson said. “The data centers will act as power plants.”
These intricate connections to create a green energy district would likely involve PG&E’s expertise.
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“Although we will start both the housing and the data centers in 2025, we want the data center to be completed slightly before the housing is completed,” Jacobson said. “We want to deliver the data center first and the housing right after that.”
This way, the data center will be operating and capable of supplying power before residents move into their housing units.
The new housing and the data centers should both be complete by 2027, Jacobson estimated. The time frame to complete the conversion to residences of the Bank of Italy tower wasn’t immediately clear.
“This will be closely coordinated with the city and PG&E,” Jacobson said. “We work with a lot of utility companies. PG&E is very forward-thinking and ambitious with how they deliver energy.”
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 at the corner of South First Street and East San Carlos Street.
— Terraine, a 17-story highrise with 345 apartments at 323 Terraine Street.
“When all is said and done, our housing portfolio in downtown San Jose will include over 4,000 residential units,” Jacobson said in a November interview with this news organization.
The concept of housing near data centers has sprouted in some villages in Scandinavia, according to Jacobson.
The idea of a downtown-wide energy district with green housing powered by data centers is a rarity, however.
“San Jose will be three years ahead of other major cities in the United States that are now kind of waking up to this idea,” Jacobson said.
