RFQ Developer Selection
159-Acre Development Opportunity
Regional Wastewater Facility
November 18, 2025
Item 8.2
Manuel Pineda
Deputy City Manager
Jeff Provenzano
Director, Environmental Services
Jen Baker
Director, City Manager’s Office of
Economic Development and Cultural
Affairs
Kevin Ice
Assistant to the City Manager, City
Manager’s Office of Economic
Development and Cultural Affairs
Recommended Actions
• Select Prologis Inc. as the preferred developer for the 159 acres of economic development land.
• Select Catellus-Deca as the backup developer for these lands.
Authorize the City Manager, or her designee to:
• Negotiate and execute an Exclusive Negotiating Agreement with the preferred developer for a term of two years with three, one- year option terms at the City’s discretion.
• Negotiate and execute an Exclusive Negotiating Agreement with the backup developer if negotiations with the preferred developer fail to provide an acceptable agreement.
2 Background – 159 Acres at RWF
• Regional Wastewater Facility co-owned by Cities of San José and Santa Clara. • 159 acres are part of the bufferlands acquired by RWF in 1998. • Land is deed restricted to prohibit odor sensitive uses such as residential or hotels. • Plant Master Plan and EIR adopted in 2013.
• 159 acres designated for industrial or commercial use (Light Industrial, Office/R&D, Retail, Clean Tech).
• 40 acres designated for recreation.
• 180 acres designated for protected burrowing owl habitat (later increased to 201 acres).
• Major development challenges such as 6-foot sewer force main and other underground infrastructure, lack of infrastructure serving site. • 250 MW available from current supply for Phase I development. • Developer to work to secure more supply for later phases. 3 Plant Master Plan
4 Background - RFQ Process
• Real estate development consultant engaged via RFQ in August 2024. • Consultant Keyser Marston selected due to experience defining and consulting on similar Bay Area projects.
• San José issued RFQ for developer of 159 acres on May 12, 2025. • “Biddingo” platform - 19,433 separate recipients.
• Keyser Marston notified curated list of 231 developers and land brokers. • Three developer responses submitted.
• September 19, 2025 – Oral presentations heard by Prologis and Catellus-Deca. • Trammel Crow was not invited to give an oral presentation. • TPAC unanimously recommends City Council approval of staff recommendation.
5 Trammel Crow and Catellus-Deca Submittals
Trammel Crow Submittal:
• 3.2 million square feet of warehouse.
• 54,000 square feet of office space.
• 60,000 square feet of retail space.
Catellus-Deca Submittal:
• 3 million square feet of “flex space” that could be data center, business park, or distribution warehouse.
• 562,000 square feet of retail space located near Highway 237’s Zanker Road exit.
6 Prologis Submittal
Land Use:
• 1.684 million square feet of data center space on four separate parcels. • 785,000 square feet of advanced manufacturing space in four buildings.
Key Features:
• Five parcels and five substations; optimized for CA regulations to develop data centers.
• Data centers and advanced manufacturing are highest and best use of the land. • Experience of team demonstrated by robust portfolio and institutional clients. • Capacity to self-finance 100% of infrastructure and development costs. • Reasonable developer’s rate of profit (8-13% IRR) and simple ground lease structure. 7 Prologis Proposal
8 Winning Attributes
• An optimized approach to data center development in California:
• Including buildings sized to maximize flexibility.
• Appropriate parcelization of the land - each Data Center is on an individual parcel with an individual substation.
• A clear path to utilizing the available 250 MW in phase I. • A plan to work with PG&E to secure an additional phase of power. • Full build out would generate an estimated $27M annually in utility taxes. • A balanced mix of uses between data center and advanced manufacturing. • A reasonable internal rate of return for the developer and a corresponding ground lease structure that mitigates risk for the RWF . • Ability and commitment to finance 100% of project development costs. • A project team with an extensive book of successful comparable projects. 9 Next Steps and Timing
• City Manager will negotiate and execute an Exclusive Negotiating Agreement:
• 90 days to negotiate ENA, with 30-day extensions at City’s discretion. • Term of ENA is 2 years, with 3 annual extensions at City’s discretion. • Open negotiations with backup developer if negotiations fail to meet City's terms. • ENA to include staff reimbursement agreement.
• Santa Clara’s City Council to hear item on 12/16.
• Santa Clara to sign the ENA
• Under the ENA, Developer will:
• Prepare land use plan and complete CEQA review.
• Complete infrastructure and phasing plans.
• Develop finance structure and negotiate terms of a ground lease. • Ground lease will return to Council for authorization in 2 to 5 years. 10 Developer Considerations
Additional areas of focus during ENA period:
• Engage the Alviso community.
• Engage Burrowing Owl habitat stakeholders.
• Engage labor stakeholders.
• Consideration of recreation and park lands.
• Incorporate sustainability measures.
11 RFQ Developer Selection
159-Acre Development Opportunity
Regional Wastewater Facility
November 18, 2025
Item 8.2
Manuel Pineda
Deputy City Manager
Jeff Provenzano
Director of Environmental Services
Jen Baker
Director, OEDCA
Kevin Ice
Assistant to the City Manager, OEDCA
Catellus-Deca Proposal – 159 Acres at RWF
13 RFQ Developer Selection
159-Acre Development Opportunity
Regional Wastewater Facility
November 18, 2025
Item 8.2
Manuel Pineda
Deputy City Manager
Jeff Provenzano
Director, Environmental Services
Jen Baker
Director, City Manager’s Office of
Economic Development and Cultural
Affairs
Kevin Ice
Assistant to the City Manager, City
Manager’s Office of Economic
Development and Cultural Affairs