During a recent discussion about changes to the Related Santa Clara development, many bemoaned the project’s delay. Related was, according to the original agreements, already supposed to have the first phase of the project completed.
Extenuating circumstances — including “adverse economic conditions,” a lawsuit, regulatory red tape, the collapse of a bank planned as an anchor tenant and a pandemic — waylaid construction. Instead of putting the finishing touches on the first phase, as originally scheduled, the New York-based developer asked the Santa Clara City Council to approve changes to the office portion, making way for, most likely, more data centers.
And, by a narrow vote, the council agreed.
The biggest reason the delay is relevant is that the portion of the 240-acre mixed-use development that was supposed to be online includes 800,000 sq. ft. of retail and a 700-room hotel. With Levi’s Stadium set to host six FIFA World Cup games and the Super Bowl in 2026, the city would have liked those amenities to be available for those marquee events.
As Mayor Lisa Gillmor said during the meeting where the council approved the zoning shift, the city strives to be a “live, work, play” destination. Santa Clara has the live and work aspect of that goal in spades, but, she said, it still desperately needs the “play” element.
A Retail Desert
Considering the Bay Area Host Committee (BAHC) and Forty-Niners Management Company (ManCo) are footing the bill for the sporting events, that also means, as per the agreements, the city will collect minimal revenue from them. Since the city isn’t on the hook for expenses, it will only collect money from a $6 event ticket surcharge, estimated to generate a little over $2 million.
Consequently, many residents and council members have emphasized maximizing auxiliary economic benefits, such as funneling money to local businesses. In the absence of businesses to serve any uptick in tourism from the events, those benefits cannot materialize.
Without Related Santa Clara online, the area surrounding Levi’s Stadium remains anemic, with the city adding little within a mile of the stadium. Since Santa Clara hosted Super Bowl 50, in 2015, the Clara Junction development, sporting roughly 18,000 sq. ft. of retail space, opened. Other than that, little has been done to develop the area.
Adding insult to injury, since then, several businesses within a mile of the stadium have closed. Among them, Bennigans, Bourbon Steak Pub, Aramark Stadium Cafe, Wicked Chicken and Armadillo Willy’s, resulting in a net loss of retail space within a mile of the stadium.
Even expanding beyond the one-mile marker doesn’t improve matters much. With its movie theatre and more than 221,000 sq. ft. of retail, the Mercado Shopping Center on Mission College Boulevard, just over a mile away from the stadium, provides some options.
Mercado Shopping Center’s presence only serves to slightly offset the demise of historic retail outside the one-mile mark.
More than 60 years ago, the city demolished its downtown. Had the city prioritized revitalizing it in recent years, it could have added a plethora of options within a couple miles of the stadium, bolstering Mercado Shopping Center’s presence.
But efforts by local civic group Reclaiming Our Downtown urging the council to do just that have also floundered, much to the chagrin of its members.
The Larger Amenity Issue
Santa Clara’s retail situation near the stadium is symptomatic of a broader problem. That’s because Santa Clara’s “play” element isn’t just retail. Community amenities include more than places to shop and eat.
The trend of dwindling amenities extends beyond retail. When recreational businesses shutter their doors, the council typically opts to replace them with housing instead of retail, accounting for Santa Clara’s stellar track record of staying ahead of the region on housing construction.
But doing so comes at a cost to residents, many of whom want more amenities, including retail.
For instance, Santa Clara used to have a bowling alley — Moonlite Lanes. But after its closing, the council opted to greenlight a housing development, one that never got off the ground.
Additionally, the fate of a regional attraction, California Great America, also remains up in the air. The park’s last season is slated to be in 2027 unless Six Flags, the park’s parent company, opts to ink a five-year extension.
However, Six Flags has yet to announce any plans to extend operations. It did announce, however, that its 2025 schedule would not include the park’s yearly Winterfest, instead closing for the year just after Halloween.
Santa Clara’s Great America opened the same year as Chicago’s Six Flags Great America. While no announcement as to the park’s future has been made, Six Flags Chicago announced a silver-anniversary jubilee at that location. Meanwhile, no such events are planned in Santa Clara, a canary in the coal mine that the park’s future isn’t bright.
These attractions are businesses. Public amenities that don’t generate money have an even bleaker outlook.
Much community anxiety has also surrounded the closure of the George Haines International Swim Center (ISC). While the city has a plan for rehabbing the pool, it needed to ask taxpayers for a bond measure to fund it, drawing into crisp focus the city’s poor track record of earmarking money to sustain public amenities.
The list goes on, with only soccer fields seemingly exempt.
Despite more than 20 years of promises, the Santa Clara Lawn Bowlers are still waiting for their clubhouse to be replaced. An increase in municipal fees — in an attempt to collect more money for government services under the shadow of a looming deficit — caused the city to lose a well-regarded baseball tournament.
To complicate matters further, one well-used amenity, the Police Athletic League’s (PAL) BMX track, is in the footprint of the Related development. While the delay with the project has given the track a reprieve, the city has yet to announce plans to relocate it, meaning yet another such amenity will likely close once retail near Levi’s Stadium takes off.
The Data Center of What’s Possible
Another component of the Related development plays into the issue of amenities. The addition of industrial use on the Related site likely portends the construction of more data centers. Silicon Valley Power’s (SVP) low rates make Santa Clara an attractive prospect for data center owners.
That demand is driving SVP’s system expansion plan. Data centers consume nearly 60% of the city’s power, and the city already has 55 of them, with three more in the pipeline. In a roughly 19-square-mile area, that makes Santa Clara one of the most densely concentrated clusters of data centers in the world, rivaling West Virginia’s “Data Center Alley.”
City employees estimate the city’s power needs will double in less than a decade. Data centers are a major driver of that growth, because the city’s population has only grown about 8% since Super Bowl 50, according to Census data. Census estimates for population growth between 2020 and 2030 are only 9% for the decade, meaning that load growth is far outpacing population growth.
That is relevant because city resources are finite. Maintaining public amenities falls under the purview of several city departments, including parks and recreation and public works. However, development that would add retail or public amenities through developer fees falls to the community development department.
Since Super Bowl 50, SVP has added between 40 and 45 employees, at increasingly higher salaries. Over the same time, the community development department has added only 10 positions, seven of which were just to service the Related development.
Residents have seen their utility bill increase four times since the start of 2023, ballooning roughly 31% .
So, while SVP continues to grow, hiring more employees at increasingly high salaries to service the system expansion — largely driven by data centers — and raising utility rates at an accelerated clip, the department responsible for adding retail and public amenities has stagnated comparatively.
Meanwhile, the city’s “play” element is hemorrhaging amenities, and its retail landscape is more like a wasteland.
Contact David Alexander at d.todd.alexander@gmail.com
