TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Christopher Burton
SUBJECT: SEE BELOW DATE: September 29, 2026
Approved Date:
10/8/26
COUNCIL DISTRICT: 4
SUBJECT: ER25-243 – Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
RECOMMENDATION
(a) Conduct a public hearing to consider the environmental appeal of the Planning Director’s reliance on an In-fill Exemption in accordance with the California Environmental Quality Act (CEQA), to allow a data center use within an existing approximately 97,800-square-foot research and development building on an approximately 4.86 gross-acre site located on the south side of Holger Way, approximately 1,870 feet west of Zanker Road (300 Holger Way) (hereafter referred to as approved project).
(b) Adopt a resolution denying the environmental appeal and upholding the Planning Director’s reliance on the In-fill Exemption for the 300 Holger Way Project, in accordance with CEQA, and finding that:
(1) The City Council has independently reviewed and analyzed the In-fill Exemption prepared for the 300 Holger Way Project and related administrative records related to Special Use Permit No. SP25-029; (2) The In-fill Exemption for the 300 Holger Way Project was prepared and completed in full compliance with the CEQA, as amended, together with state and local implementation guidelines; and
(3) Reliance on the In-fill Exemption for the 300 Holger Way Project reflects the independent judgment and analysis of the City of San José, as the lead agency for the Project; and
(4) Preparation of an Environmental Impact Report or Mitigated Negative Declaration/Negative Declaration is not required because the appeal does COUNCIL AGENDA: 10/20/26
FILE: 26-1081
ITEM: 10.4
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
not raise any issues that would disqualify the project from the In-fill Exemption for the 300 Holger Way Project.
SUMMARY AND OUTCOME
The hearing before the City Council is a de novo hearing pursuant to Section
20.100.2801 of the Zoning Code. This means that the City Council considers the request anew, along with the staff report, comments from the appellant and applicant, and other information as part of the administrative record, and must make the required findings to grant the permit or determine whether the required findings cannot be met and deny the In-fill Exemption for the 300 Holger Way Project.
Denying the appeal and approving the environmental exemption in accordance with CEQA will allow a data center use within an existing approximately 97,800-square-foot research and development building on an approximately 4.86 gross-acre site located at 300 Holger Way.
Upholding the appeals and denying the Planning Director’s reliance on the environmental exemption will void the Planning Director’s CEQA determination. The project applicant will be required to prepare a new or revised environmental document for the approved project. Alternatively, the applicant could choose not to proceed with the approved project.
BACKGROUND
Reason for Hearing
On July 10, 2026, Adams Broadwell Joseph & Cardozo, on behalf of Kelilah Rederman from Citizens for Responsible Industry filed a timely appeal of the Environmental Determination associated with the Planning Director’s decision issued on July 8, 2026, to approve the use of an In-fill Exemption as the appropriate environmental clearance for the 300 Holger Way Project under File No. ER25-243.
Site Location
The approximately 4.86-gross-acre project site is located on Holger Way (300 Holger Way). The site is developed with an approximately 97,800-square-foot research and development building built in 2000 and associated site improvements. The site is 1Link to SJMC Section 20.100.280 Zoning Code:
https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT21ENCL_CH21.04GEP RPR_PT2PR_21.04.140APEN
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
surrounded by open space to the north beyond State Route 237, residences to the southwest, and industrial uses to the east, southeast, and west.
Project Description
The associated Special Use Permit application (“Planning Application”) was filed in December 2025 by the applicant, Holger Technology Partners, LLC. The project consists of a Special Use Permit to allow a data center use within an existing approximately 97,800-square-foot research and development building on an approximately 4.86 gross-acre site located at 300 Holger Way. No tree removal, ground disturbance, new construction, exterior equipment or off-site improvements are proposed as part of the project
Environmental Review
The City of San José, as the lead agency, prepared a Class 32 In-fill Exemption (Attachment A) pursuant to Section 15332 of the CEQA Guidelines. The exemption was included with documents posted for public review prior to the July 8, 2026, Director’s Hearing. The environmental review process found that the project qualifies for a Class 32 In-fill Exemption because the proposed use is consistent with the General Plan and Zoning, is on a site less than 5 acres, and would not result in any significant impacts to sensitive habitats, transportation, air quality, noise, or water quality because the applicant proposed only interior changes to the existing building on the project site.
Furthermore, none of the exceptions to Categorical Exemptions in Section 15300.2 of the CEQA Guidelines apply to the project, as the project site is not a hazardous waste site on any list compiled pursuant to Section 65962.5 of the Government Code2 and does not contain any historic resources3.
Based on the information provided, the City, as the lead agency, concluded that the proposed project would not result in any significant and unavoidable impacts, and that a Class 32 In-Fill exemption is the appropriate level of CEQA clearance for the project.
The project was approved by the Hearing Officer at the July 8, 2026, Director’s Hearing.
A summary of the hearing is provided below.
Director’s Hearing
On July 8, 2026, a Director’s Hearing4 was held to consider the Special Use Permit and associated Environmental In-fill Exemption. The project was placed on the Public Hearing portion of the hearing agenda. A Principal Planner was designated the Hearing Officer on behalf of the Director of Planning, Building and Code Enforcement. A Planning Project Manager staff provided an oral presentation on the project, highlighting 2 Link to CalEPA Data Resources: https://calepa.ca.gov/sitecleanup/corteselist/ 3 Link to GIS Historic Resources Inventory:
https://experience.arcgis.com/experience/4ef3418d9e58451c9c45086ac9a90d6e 4 Link to hearing recording: https://sanjose.granicus.com/player/clip/15717?view_id=54&redirect=true
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
the project’s consistency with the General Plan, Zoning Ordinance, Citywide Design Standards and Guidelines, and City Council Policy 6-30 for public outreach. An Environmental Planning Project Manager staff summarized the Environmental Planning process in accordance with CEQA and addressed concerns submitted in a July 7, 2026, comment letter from Adams Broadwell Joseph & Cardozo on behalf of Citizens for Responsible Industry.
Two members of the public spoke during the public hearing portion of the Director’s Hearing. One individual spoke against the project and raised concerns about data center use and impacts to air quality, noise, public health, and burrowing owl habitat.
The second individual asked for clarification on whether water meters would be installed at the nearby mobile park and be impacted by rising water costs due to the proposed change to data center use and associated water use.
After hearing public comments and staff responses, the Hearing Officer noted the project’s consistency with all applicable plans, ordinances, and policies. The Hearing Officer also determined that the In-fill Exemption and associated conditions of approval were adequate and appropriate for the project. The Hearing Officer clarified with the Planning Project Manager that there would be no grading, new construction, exterior equipment or off-site improvements proposed as part of the project and that additional permitting, including additional environmental review, would be required if such actions were proposed. The Hearing Officer also clarified that there would be no impact to burrowing owls because the site is already developed. The Hearing Officer then approved the project (Attachment B).
Permit Appeals
No appeals of the Special Use Permit were filed.
Environmental Appeals
One timely appeal of the Environmental Determination was filed (Attachment C). The appeal was received on July 10, 2026, from Adams Broadwell Joseph & Cardozo on behalf of Kelilah Rederman from Citizens for Responsible Industry. The appeal was filed in a timely manner pursuant to San José Municipal Code Section 21.04.140.E.1.a5, which states that an appeal must be received no later than the third business day following an action taken on the environmental determination as part of a public hearing.
Friday, July 10, 2026, was the third business day after the public hearing held on Wednesday, July 8, 2026.
The environmental appeal raises six main concerns regarding the Hearing Officer’s determination that the project qualifies for a CEQA infill exemption:
5 Link to San José Municipal Code Section 21.04.140.E.1.a:
https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT21ENCL_CH21.04GEPRPR_PT2P R_21.04.140APEN
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
1. The Statement of Exemption and Special Use Permit relied on an incomplete Project Description.
2. The project would result in significant, unmitigated air quality, hazardous, and greenhouse gas (GHG), and public health impacts.
3. The project would result in significant noise impacts.
4. The project is located on a site that is valuable habitat for Western Burrowing Owls.
5. A Water Supply Assessment is required for the project.
6. The project is not consistent with the Municipal Code and all applicable General Plan policies.
ANALYSIS
Responses to the appellants’ claims supporting the appeal of the Environmental Determination are discussed below.
Claim #1: The Statement of Exemption and Special Use Permit relied on an incomplete Project Description
The appellant argues that the project does not qualify for a categorical CEQA exemption because the project description used as the basis for the exemption is incomplete.
The appellant claims that the project description is missing information on some required exterior equipment and electrical upgrades including emergency generators, chillers, and backup battery installations, and therefore the Director’s approval of the project impermissibly piecemealed the environmental review in violation of CEQA.
Staff Response:
The project description used for the environmental review accurately describes the scope of the project proposed by the applicant and reviewed by the City. The applicant’s complete planning application, submitted in December 2025, included a project description that did not propose exterior equipment, electrical upgrades, or installation of any emergency generators, chillers, or backup batteries. No exterior equipment and electrical upgrades are included in the site plan that was submitted as part of the planning application. The emergency generators, chillers, backup batteries, and other equipment identified by the appellant therefore are not components of the project and are not omitted components of the project description.
In May 2026, staff confirmed with the applicant that there are no plans to install exterior equipment and electrical upgrades as part of this project. Therefore, the project description used as the basis of the Class 32 In-Fill exemption is complete and accurate.
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
Accordingly, the environmental review was based on the complete scope of the proposed project. The City did not exclude any reasonably foreseeable project components from the environmental review. Therefore, the appellant’s claim that the project description is incomplete is not supported by the project application or the studied project.
Claim #2: The project would result in significant unmitigated air quality, hazardous, and greenhouse gas (GHG), and public health impacts The appellant claims that development of the project would result in significant and unmitigated air quality, hazardous, and greenhouse gas (GHG), and public health impacts from diesel particulate matter emissions, disturbance of historical soil contamination of TCE and PCE, and cooling technology.
Staff Response:
The project does not include activities or equipment that would result in the impacts identified by the appellant. Specifically, the project does not involve ground disturbance, grading, demolition, or other construction activities that would disturb soil or potentially expose contaminated materials. The project also does not include the installation or operation of diesel generators or other equipment that would generate diesel particulate matter emissions. In addition, the project does not propose exterior mechanical equipment or cooling technology that would result in air quality or GHG impacts identified in the appeal.
CEQA Guidelines Section 15332 for In-Fill Development Projects establishes five criteria that must be satisfied for an in-fill development project to qualify for the exemption. These criteria include that the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. Based on the scope of the project, which focuses all improvements inside the building and does not include any sources of pollution or noise, there are no project activities that would generate the alleged air quality, hazardous materials, GHG, or related public health impacts.
Accordingly, the project would not result in significant air quality impacts, and mitigation measures for the alleged impacts are not required.
Claim #3: The project would result in significant noise impacts The appellant argues that the City's CEQA review failed to evaluate significant noise impacts from exterior equipment including mechanical equipment, emergency generators, and cooling equipment.
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
Staff Response:
CEQA Guidelines Section 15332 requires five criteria that must be met for an in-fill development project, including that approval of the project would not result in any significant effects relating to noise. The approved project does not include any new development, installations or the operation of exterior equipment, including cooling technology, or other noise-generating equipment. Therefore, the noise sources identified by the appellant are not components of the project. Since the project does not include any new exterior development or equipment that would generate operational noise, the project would not result in any significant noise impacts and mitigation for noise is not required.
Claim #4: The project is located on a site that is valuable habitat for Western Burrowing Owls
The appellant argues that the Project site is located on valuable habitat for the Western Burrowing Owl (burrowing owls) and that the project may take habitat from the burrowing owls which are a rare, threatened and endangered species.
Staff Response:
The project site is located within a fully developed industrial park campus. The site and surrounding campus are developed with existing buildings, paved roads, paved parking areas, and associated landscaping. The project does not involve any new exterior development or disturbance of undeveloped land. An open space area is located across the paved parking lot and across Highway 237, north of the project site.
In California, burrowing owls are a species of special concern. The Santa Clara Valley Habitat Plan includes mapping of areas identified as potential burrowing owl habitat and identifies portions of the area surrounding the project site as an area within the Burrowing Owl Fee Zone. However, the Habitat Plan mapping does not accurately reflect the existing developed condition of the project site which is fully developed with existing buildings, parking, and landscaping.
Consistent with the existing developed conditions, City staff confirmed with Santa Clara Valley Habitat Agency staff in May 2026 that the applicant would not be required to pay fees despite the project being located in the Burrowing Owl Fee Zone because the project site is fully developed. In addition, the project does not include ground disturbance or development of the open space area where habitat is mapped.
Accordingly, the project would not remove or disturb burrowing owl habitat as the project site has no value as habitat for burrowing owls.
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
Claim #5: A Water Supply Assessment is required for the project The appellant argues that the Project requires a Water Supply Assessment because the water demand for the 20 MW data center Project will exceed the water demand of 500 dwelling units.
Staff Response:
A Water Supply Assessment is not required for the project. Per California Water Code 10910 (a) and (b), the statutory requirement for preparation of a Water Supply Assessment is based on the type and characteristics of a proposed development and the applicable statutory thresholds and is not triggered solely because a project's estimated water demand may exceed the water demand of 500 dwelling units. The project includes reuse of an existing developed site that is currently served by existing utilities and public services.
According to the applicant, the projected maximum water use for the proposed project is estimated to be 128,800 gallons/day at peak usage, although average daily water consumption would be 55,525 gallons per day. San José Municipal Water System staff confirmed that the existing two-inch water pipeline would be able to accommodate the potable water demands associated with the proposed operations. Therefore, the appellant's comparison of the project's water demand to the water demand of 500 dwelling units does not establish a requirement for a Water Supply Assessment.
Claim #6: The Project is not consistent with all applicable general plan policies and regulations
The appellant argues the Project is not consistent with all applicable General Plan policies and regulations because the Project violates Envision San José 2040 General Plan Policies MS-2.2, M.S-4.4, MS-10.1, MS-10.2, MS-10.7, ER-4.1, and General Plan Action MS-2.8.24.
Staff Response:
A summary of the policies cited in the appellant’s claim and how the proposed project complies with the policies are summarized in Table 1 below:
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
Table 1: Summary of Project Compliance with General Plan Policies General Plan Policy Project Compliance with
General Plan Policy
MS-2.2: Encourage maximized use of on-site
generation of renewable energy for all new and
existing buildings.
The Project will maintain current
levels of on-site generation of
renewable energy to the existing
building.
M.S-4.4: Develop and implement policies and
ordinances to promote beneficial construction and
pre-occupancy practices such as sealing of the
HVAC system during construction, air flush-outs
prior to occupancy, and/or air quality testing and
corrections prior to occupancy.
The project does not include any
construction. Therefore, this
policy does not apply to this
project.
M.S-10.1: Assess projected air emissions from
new development in conformance with the Bay
Area Air Quality Management District CEQA
Guidelines and relative to state and federal
standards. Identify and implement feasible air
emission reduction measures.
The project does not include
activities or equipment that would
result in new air pollutant
emissions or impacts to air
quality. Therefore, the project
complies with M.S-10.1, M.SM.S-10.2: Consider the cumulative air quality 10.2, and MS-10.7. impacts from proposed developments for
proposed land use designation changes and new
development, consistent with the region’s Clean
Air Plan and state law.
MS-10.7: Encourage regional and statewide air
pollutant emission reduction through energy
conservation to improve air quality.
ER-4.1: Preserve and restore, to the greatest
extent feasible, habitat areas that support specialstatus species. Avoid development in such habitats unless no feasible alternatives exist and
mitigation is provided of equivalent value.
The Project does not include new
development in habitat areas that
support special-status species.
Therefore, this policy does not
apply to this project.
In addition, CEQA Guidelines Section 15332 requires five criteria that must be met for an in-fill development project, including that the project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. The project site is in the Industrial Park (IP) Zoning District, which allows “data center” use subject to approval of a Special Use Permit. Further, no exterior modifications would be made to the existing, conforming building and the project will remain consistent with the setback and height requirements of the Industrial Park Zoning District. Pursuant to approval of Special Use Permit, the project would comply with the development standards of the Industrial Park zoning district.
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
The project site is designated Combined Industrial/Commercial within the Land Use/Transportation diagram of the Envision San José 2040 General Plan. Properties with this designation are intended for commercial, office, or industrial developments or a compatible mix of these uses. The proposed reuse of the building as a data center is generally consistent with the General Plan designation because the project would preserve existing industrial areas and not establish any non-industrial uses that are incompatible with the land use designation. As proposed, the project is consistent with the applicable policies and regulations within the General Plan.
Staff Conclusion
Based on the analysis above, the project complies with all local and state requirements.
Thus, staff recommend denying the environmental appeal and upholding the Hearing Officer’s approval of the environmental findings for the approved project.
EVALUATION AND FOLLOW-UP
The City Council is the final decision-making body for this Special Use Permit and the Environmental Determination for this project.
If the City Council denies the environmental appeal and upholds the Planning Director’s decision, then the applicant may proceed with the acquisition of the necessary permits to implement the required conditions of approval to complete the 300 Holger Way Project.
If the City Council approves the environmental appeal and reverses the Planning Director’s reliance on the Environmental In-fill Exemption for the Special Use Permit, the Planning Director’s CEQA determination would be rendered void, and the applicant would be required to prepare a new environmental document, such as an Initial Study or an Environmental Impact Report, prior to reconsideration of the project.
COORDINATION
The preparation of this memorandum has been coordinated with the City Attorney’s Office, City Manager’s Budget Office, Public Works Department, and the Transportation Department.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the October 20, 2026 City Council meeting.
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
Additionally, staff followed City Council Policy 6-30: Public Outreach Policy6 to inform the public of the proposed project. On-site signs have been posted on the project frontage since January 30, 2026. A notice of the public hearing was distributed to the owners and tenants of all properties located within 1,000 feet of the project site and posted on the City website. The staff report and In-fill Exemption memorandum is also posted on the City’s website, and staff has been available to respond to questions from the public.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action. Since the appeal of the director’s decision focused on the environmental determination, the project is heard directly by the City Council.
CEQA
Exempt, CEQA Guidelines Section 15332 for In-fill Development Projects, File No.
ER25-243 for the 300 Holger Way Project.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution. /s/
CHRISTOPHER BURTON, Director
Planning, Building, and Code Enforcement
For questions on the permit appeal, please contact Jacqueline Guerrero, Planner III, Planning, Building, and Code Enforcement Department at
[email protected] or (408) 535-8235. For questions on the environmental appeal, please contact Charlotte Yuen, Planner II, Planning, Building, and Code Enforcement Department at [email protected] or (408) 794- 7386.
6 https://www.sanjoseca.gov/home/showpublisheddocument/12813/636669915135130000
HONORABLE MAYOR AND CITY COUNCIL
September 29, 2026
Subject: ER25-243 Administrative Hearing on the Appeal of the In-fill Exemption for a Data Center Use at 300 Holger Way
ATTACHMENTS:
Attachment A – In-Fill Exemption for 300 Holger Way
Attachment B – Permit Approved at Director’s Hearing
Attachment C – Environmental Appeal Application