The Left Hook Lands a Punch on San Jose’s Chin: Reports $32 million in Traffic Impact Fee Waived for a Developer

By Robert Haugh

The Left Hook, the South Bay Labor Council’s blog, threw a nice punch last week. They wrote a story about how the city of San Jose has allegedly waived traffic impact fees for Federal Realty, the developer of the Santana West project that will redevelop the old Flames Restaurant and Century Theatres on Winchester.  It’s a good read.

The fee waiver is not just peanuts. According to the report, it may be $32 million. Wow. That’s a lot of money that could be used for traffic improvements. Anyone who’s been to the Stevens Creek and Winchester intersection knows it’s bumper-to-bumper gridlock.


San Jose Inside first reported about how much Federal Realty was paying for the 1 million square foot office development when the project was approved 15 months ago:

  • $1 million in traffic impact fees
  • $4 million for new traffic signals and roadway improvements
  • $1 million for a “voluntary contribution” to the Valley Transportation Authority.

But now we learn there’s more to the story.  The Left Hook reports that there will be 9,457 new vehicle trips generated by the project. That’s a lot of cars. The traffic impact fee should have been closer to $33 million according to San Jose’s own calculations, not $1 million. That’s a lot of money to give to a developer.

We hear that story set off some rumblings at Santa Clara city hall because the Mission City is suing San Jose over the Santana West development. This story should help Santa Clara’s cause.

The Left Hook also writes that they’re watching the Google negotiations with San Jose to see if developers and tech companies like Google will continue to get deals and fee waivers from the Garden City.  Kudos to The Left Hook. If San Jose isn’t making developments pay their share of traffic improvements, other cities, like Santa Clara, will be negatively impacted. We see that at Stevens Creek and Winchester already. Let’s hope a legal win will make San Jose more responsible when it comes to development and traffic.


  1. Hey … Robert, let’s be honest here … Santa Clara has ZERO traffic impact fees! At least San Jose has some.

    When is Santa Clara going to even START collecting any traffic mitigation fees?? This has been brought up at City Council meeting, along with applying other developer fees, but it has fallen on teflon suits who have been purchased BY developers. Exactly when is Santa Clara goi g to get on par with the surrounding cities when it comes to charging developers and businesses?

    Please Robert, get this answered by Mayor, Council and city hall … Santa Clara needs to collect this and other fees too.

  2. San Jose has a history of giving sweetheart deals to big developers, and may not even be enforcing those, as reported by San Jose Inside.
    Audit: High-Rise Developers Get Special Access, Breaks on Fees

    “Additionally, the city failed to properly account for parkland fees on residential high-rises. Among several other incentives, San Jose gives qualifying developers a 50 percent discount on park fees and allows payment deferrals until 80 percent of inspections have been scheduled. However, the city has no reliable method for checking whether a project meets that threshold, auditors found.

    What’s more alarming, however, is that the city has also compromised on critical safety standards. According to the audit, the city realized late in the process that the smoke control system at One South Market needed significant changes to meet life safety requirements. That required last-minute additions to an already-installed system.

    But the city actively promotes high-rise development by offering tax breaks and expedited permitting. In addition to the park fee waivers, other incentives offered by the city include half-off discounts from construction tax, commercial-residential tax and waived parking requirements.”

    This kind of stuff can also affect Santa Clara. As an example, waived park fees can result in residents coming to Santa Clara to use our parks. In fact, that’s what certain urban village advisory group members admitted to, because we have nice public parks.

  3. This will surely affect Santa Clara – and not just the area immediately around Santana West. Because people will be driving through Santa Clara (San Thomas Expy , Winchester, etc) to get to Santana Row.

    San Jose is desperate to become like surrounding communities – “job rich” instead of “housing rich”. It is going to make the affordable housing situation situation even worse. The urban village plans will make things worse as well. They are not really interested in the housing, since any “signature” project MUST provide more commercial than residential.

    It’s kind of genius, to put this kind of stuff on your neighbor’s doorstep, ignoring their concerns, to let them deal with it.

    And then we’ll have a certain Santa Clara planning commissioner (to remain unnamed) point to it and say “well, San Jose is building stuff like that, we should too.”

  4. For decades San Jose’s corrupted Redevelopment Agency as well as the Mayors, Council Members (City Managers smartly laid low out of sight as the graft continued unabated) and the senior San Jose staff kept giving away big money. Even after SJ RDA was dissolved this bad practice continued.

    The same old pathetic excuse was that it was the ONLY way to get development downtown. That is partly true but also true due to San Jose’s incompetence and zero creativity.

    But assuming this decades old LIES were actually true… we are talking about Santana Row West. Federal Realty will build that development even if they did not get $1 in giveaways as that is the hottest area of San Jose right now.

    Downtown SJ advocates have always pointed out that Valley Fair led to the decline of downtown. So what is this $32 million giveaway portend for downtown San Jose?

    How gigantic are the San Jose leaders going to give Google.

    And who will hold Mayor Sam Liccardo responsible for this 100% unnecessary corporate welfare to Federal Realty?
    NOBODY! Sam and his minions have made sure that NOBODY of any significant political stature will run against him.
    They are being promised a clear path during the next election.

    After all, we wouldn’t want to let San Jose’s Golden Boy not win a second Mayoral race and upset his future plans in California and national politics.

    Prime example of how politics is so corrupting!

    Lets’s hope this egregious corruption by San Jose leadership helps Santa Clara win in court!!!

  5. I never go to Santana Row anymore. Traffic is lousy and parking is tough to find. Now we know why. San Jose should not waive fees for traffic.

  6. Thanks for the heads up.
    It isn’t about fair or share, it is about them paying for the impact of their actions. When you go to the store to buy something you aren’t asked to pay your fair share, you are required to pay for what you leave with. By not requiring the developer to pay for the impact of their actions the taxpayers, both SJ and SC will pay the bill.
    Enough of letting developers force the taxpayer to pick up their tab.

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