San Pedro Square Market has transformed not only the San Pedro Square neighborhood, but the whole downtown. It has become the heart of the downtown social scene, and an integral stop before an event at the SAP Center. And now this square is attracting something new, investment. Nearly $1B is currently being invested into new high-rise residences, ground floor retail and a courthouse, all within a 2 block radius of the Market.
Which that brings us to the Market & San Pedro Garage, a 6 story parking structure that sits directly in the middle of San Pedro Square. The garage might be the runner up to the most well known and visited structure in downtown San Jose after the SAP Center. That’s because for the last 25 years, it has been the first stop for attendees to Sharks games, concerts, and all other functions at the SAP Center. With all this capital investment going into the adjacent properties, the garage’s land value continues to rise, prompting the question: when does land become too valuable to just park cars?
Even though this is a city owned garage, the land underneath it is some of the most desirable in all of downtown. According to Google maps, the garage sits on 1.84 acres, which is equivalent to the land that Silvery Towers is being built on. If a developer bought the property, and mimicked Silvery Towers, they would be adding another 600+ residential units, and extending retail across San Pedro Street(something that is desperately needed). Or with the office market beginning to heat up with proposals for new office in the pipeline for the first time in half a decade, a developer could build 300,000+sqft of Class A office. So at what point does 6 floors of parked cars become an real estate equation that doesn’t compute?
The idea does present several challenges and questions. If the city sells the garage, would there be a requirement to the developer to replace any lost parking spaces? Would the developer look to supply the same amount of parking elsewhere in downtown? Or, would the developer work around the existing structure, and build on top? Or, demolish some of the structure and build around the rest? The options are there, but does that make the property more appealing or less appealing?
There is also the bigger picture. In the decades ahead, BART will come to downtown(a proposed station is half a block away from the garage), San Pedro street could be closed to vehicle traffic, making it an actual square, pedestrian/bicycle safety and access is a growing concern in the urban core, does a static income from parking cars, a known commodity to the city, benefit the city as much as the potential dynamic income from adding residential units, office space, or retail? The business, sales, and property taxes alone would provide a greater income to the city. Add to that more people living their daily lives in downtown and this project could be a huge win for the city.
But maybe downtown’s land prices aren’t equitable yet. Maybe having the garage complicates any deals that developers want to make with the city, and maybe, the city is completely opposed to selling it. Currently the garage is the main hub for visitors in downtown. Maybe that is enough to keep the status quo. But if the garage land is sold, and the parking does go away, where do those cars go? That is a question that may need an answer sooner than later.