What's Happening?
San Jose is set to negotiate with Prologis, a leading logistics real estate developer, to transform a 159-acre site near the regional wastewater plant into a data center and advanced manufacturing campus.
This development, known as the Sustainable Technology, Engineering and Manufacturing (STEM) Park, will include four 99MW data centers and advanced manufacturing facilities. The project is expected to generate significant economic benefits for the city, potentially adding $30 million annually to San Jose's general fund through utility taxes and rent. The city has already secured commitments from PG&E for major grid improvements to support this development, which will triple the city's power capacity.
Why It's Important?
The proposed development by Prologis represents a significant economic opportunity for San Jose, potentially creating high-paying jobs and advancing the city's role in the artificial intelligence and manufacturing sectors. By utilizing the existing excess capacity of PG&E's grid, the project aims to lower energy costs for residents and businesses. This initiative aligns with broader trends in urban development, where cities are increasingly focusing on sustainable and technologically advanced infrastructure to drive economic growth. The project could serve as a model for other cities looking to balance industrial growth with energy efficiency.
What's Next?
The deal with Prologis requires approval from the San Jose City Council. If approved, construction is expected to begin between 2028 and 2029, with initial occupancy by 2030. PG&E will conduct load and system impact studies to determine the necessary infrastructure to support the development. If the agreement with Prologis does not materialize, the city has identified Catellus-Deca as a backup developer. The successful implementation of this project could influence future urban planning and development strategies in Silicon Valley and beyond.
Beyond the Headlines
This development highlights the growing importance of integrating energy infrastructure with urban planning. The collaboration between San Jose and Prologis underscores the potential for public-private partnerships to drive innovation and economic growth. The project also raises questions about the environmental impact of large-scale data centers and the need for sustainable energy solutions. As cities continue to evolve, balancing technological advancement with environmental stewardship will be crucial.
