Santa Clara Settles Lawsuit with San Jose and Wins Big: Ka-Ching

By Robert Haugh

Santa Clara and San Jose settled the City Place and Santana West lawsuits yesterday. The Mission City won big. Once again, David beat Goliath.

Here’s the scorecard we compiled from the “joint press release” that the City of Santa Clara sent yesterday.

SCSJLawsuit.jpgGiven the relative size of the projects, Santa Clara pinned San Jose with a WWE-style top-rope finishing move – such as the Superfly splash. City Place is far bigger and more valuable a project than Santana West.

It looks like the Related Companies had to come up with an additional $10 to $15 million to get San Jose to drop it’s appeal. For the size of their project (estimated $6.5 billion), that’s not a lot of dough. But almost $9 million of that money will go from San Jose’s city coffers back to Santa Clara for Santana West. The Mission City didn’t have to put up anything more to settle the cases. Wow.

This a big win for Mayor Lisa Gillmor and Councilwomen Teresa O’Neill, Debi Davis and Kathy Watanabe who led the effort to sue San Jose after the Garden City sued the City Place project. Kudos to them.

Our sources say that Councilman Pat Kolstad initially wanted to concede to San Jose, but supported the council majority after the City Place legal victory in November.  He gets a half kudo.

This is big loss for Vice Mayor Dominic Caserta and Councilwoman Patty Mahan who wanted to drop the Santana West lawsuit and settle for no transportation improvements or cash from San Jose in a settlement, according to the Silicon Valley Business Journal.  Santa Clarans should be happy they lost.

We hear from sources in both city halls that San Jose was desperate to settle because the Santana West case was scheduled to be heard yesterday in front of San Mateo County Superior Court Judge Marie S. Weiner — the same judge who ruled decisively against them in the City Place lawsuit last November.

It may have been desperation, but it was probably smart. Santa Clara had beaten San Jose three times in court in the last year:

  1. San Jose tried to get the Santana West lawsuit dismissed — and failed.
  2. San Jose filed an anti-SLAPP lawsuit saying the Santana West lawsuit was retaliatory — and failed. (Lawyers I know who are anti-SLAPP experts are still scratching their heads on San Jose’s move).
  3. San Jose sued City Place — and lost.

It’s pretty obvious that San Jose needs better lawyers or political leadership, especially when going up against Santa Clara.  But for now, we’re glad they don’t have either. And Santa Clara has both.

We’re also glad that the Mission City wasn’t afraid to stand up to San Jose on an issue that’s important to our future.

Now, we get to build City Place, creating a world-class destination in North San Clara. And San Jose will build Santana West, creating more traffic jams around Santana Row.

This slideshow requires JavaScript.

Above: City Place renderings


  1. You can add Kirk Vartan to that list of lawsuit naysayers critical of the Mayor. 7 months ago in response to a Mercury News article he said “This is a joke. Wasting time and money to sue each other is bad for everyone.” and “JUST STOP THE LEGAL EXPENSES AND WORK TOGETHER. THAT’S WHAT THE RESIDENTS WANT.”

    This is a win for all residents because now developers along Stevens Creek Blvd will not be able to assume they will get a pass on paying mitigation fees from an uber-compliant San Jose Council and Mayor, although as Robert reported in this case it is still just a fraction of what should have been charged. It’s moving the ball forward in the right direction. My only wish was that San Jose’s project got denied for exacerbating the already bad traffic and housing crisis in the area. 1M sq ft will be adding 5000 workers who will have to live somewhere.

    Looks like there’s some legal obligations to pay for development along SCB, I hope also for Fortbay at 4300 Stevens Creek, which has just upsized their development proposal (surprise!), trying to get it done under the noses of everyone. 300K office (for probably around 2000 workers) and ~600 housing units now.

    Of course, if you look at the public comments at that San Jose project page Kirk Vartan pretty much indicated he just wanted to “let the developer build what they can”. Hopefully now the developer will need to pay adequate fees, and take that into account.

    • What I continue to ask for is to work together. We have a rare opportunity to influence the outcome of someone substantial. I know many are upset with the notion that this change is happening at all. Maybe a different (productive?) approach would be to define the scale of change that has happened in the past 15 years and what is needed/expected over the next 15 years. And we can track what has taken place.

      I believe, at the very least, we will see that substantial office and tech jobs were created. And it is not stopping. If we cannot agree on that, then that is something we should debate. And given that, do we have enough housing capacity for the people? Again, I don’t know what we are arguing about.

      It’s back to: How are we working together to make this region function?

      We are not functioning as a region. If you want to take my comments our of context, label me as a critic, or whatever, go ahead. But that is not moving the ball down the field. If all you want to do is delay projects and delay the change so that current lifestyles are minimally impacted (at the expense of the regional success), I’m not willing to do that. We are all impacted already. Quality of life is already impacted. Current solutions are not making things better. I think there is a lot of common ground. Why are you resistant to finding out how to collaborate without lawyers?

  2. In reading some responses, it seems that there might be a bit of a misinterpretation of my comment. I am not suggesting you give San Jose a pass on anything. In fact, if you look at what I wrote, all I said was to report the facts. Nothing wrong with giving opinion on concerns. But there is no need to trash-talk a project…or a city. What gets accomplished? How is that moving the ball forward? How does the validation of poor planning in San Jose make Santa Clara better?

    We all know there are concern with traffic and circulation; there have been concerns for like two decades. There are lots of opportunities for improvement in San Jose and Santa Clara. Let’s all focus on moving forward together. This is a good thing for everyone. Both cities get to move their projects forward. How they integrate into the fabric of our region is the challenge we all need to help define.

  3. This reporting is good because it gives us the facts. The criticism of San Jose is good too because the city needs to be criticized. San Jose development policies are atrocious. They have made traffic worse for all the cities in the area. San Jose gives developers breaks on everything — parks, roads, … That’s why neighborhoods are getting worse in San Jose. And the bad San Jose traffic is being pushed to other cities. The last thing we need is a reporting that pats San Jose on the back. The Murky News and Biz Journal do that. They are just enabling San Jose. It’s like giving more crack to a dope head. They’re not helping. Calling out San Jose is the right thing to do. I wish there was more writing like this. Oh by the way, I haven’t been to Santana Row in years because of the traffic and parking.

  4. I think it is great that you captured the details of the settlement so we all understood what took place (since the Silicon Valley Business Journal is a locked article), but that is where the positive feedback ends.

    It is NOT helpful to continue to perpetuate the conflicts Santa Clara and San Jose have been experiencing. Do we really need more fodder to this? Santa Clara and San Jose need to work together. In fact, they need to work well together. Showing how one city beat the other or how one development sticks it to the other is not necessary…and not helpful. For example, did you really need to say, “And San Jose will build Santana West, creating more traffic jams around Santana Row”? No. You can share your excitement for City Place as you should, but making another project look bad (or the community around Santana Row feel bad) is poor form and beneath an objective reporter’s mission. Just display the facts and let your audience draw their own conclusions. Show how these developments can add value and quality of life to the areas. Identify how placemaking will create great places in the region, and these are two of the best in Silicon Valley. Vallco will be a third. Let’s find a way to focus on how the future will look.

    I guess I am simply asking for a bit more of a humble tone in this kind of reporting. Many of us on the ground here are looking for ways to connect our communities, not pit them against each other.

    I share my opinion out of respect I have for your publication. Thanks for reading.

Leave a Reply