$1 billion vision for San Jose

[djdany]

A fledging group of cultural enthusiasts is lining up support for a $1 billion-plus plan to transform downtown San Jose into Silicon Valley's sports, entertainment and cultural mecca.

The "Creative Urban Center" plan being put together by 1stAct Silicon Valley is backed by leaders of most cultural arts entities in the city. The plan -- which presumably would rely on a bond issue and require a public vote at some unspecified date -- is designed to have a little bit of something for everybody, including new baseball and soccer stadiums, a new concert hall and art museum as well as a bevy of renovated theaters for every taste.

"With San Jose being the (nation's) 10th-largest city, there is no reason why we shouldn't be a ... destination," says Connie Martinez, executive director of the Children's Discovery Museum of San Jose and co-chair of a 1stAct subcommittee putting the finishing touches on the plan.

The proposal, scheduled to be presented to the public by June, is being put together with financial backing from Adobe Systems, the David and Lucile Packard Foundation and the William and Flora Hewlett Foundation, among others.

Among the projects in the planning stages are:

An expansion of The Tech Museum with a veritable theme park of interactive simulations and games on the site now occupied by Parkside Hall.

Construction of separate state-of-the-art stadiums for professional baseball and soccer and a renovation of Spartan Stadium.

An upgrade of the San Jose McEnery Convention Center that would make the area now covered by a temporary tent into permanent exhibit space.

Construction of a new music center and a $35 million upgrade of existing downtown theater venues.

Relocation of the San Jose Museum of Art to the old Dr. Martin Luther King Jr. Library site on San Carlos Avenue.

The subcommittee hopes to have a first draft computer-imagined PowerPoint presentation put together by April that will show what San Jose would look like with its makeover complete. Projects will be added and/or dropped and the presentation fine-tuned with an eye toward a public unveiling in June.

"It will look very good. The question is how do we (finance) it," says Dan Keegan, executive director of the San Jose Museum of Art, who is working with Ms. Martinez on finishing the proposal. "Right now, money isn't the emphasis. It's really about the vision."

The idea of making downtown San Jose a "destination center" is not a new one. The San Jose Redevelopment Agency's push to get more restaurants and clubs downtown, the introduction of the San Jose Grand Prix, the Jazz Festival and Cinequest and the push to build high-rise condominium towers have all fed into the idea of developing a "critical mass" of people to turn downtown San Jose into a thriving entity.

However, despite some successes, downtown San Jose has had its share of failed visions.

Most prominent is the $1 billion Palladium Co. downtown renewal project, which envisioned retail, housing, hotel and office development. It never got off the drawing board partly because of unrealistic expectations and a changing economic landscape. The proposed BART extension into San Jose faces an uncertain future due to funding woes while the San Jose McEnery Convention Center tried and failed to get funding for an $320 million permanent expansion project.

Meanwhile, developers have complained that San Jose city officials stymied downtown development during the 1990s by moving too slowly on proposed projects.

Developer Lewis Wolff, who has expressed interest in bringing a Major League Soccer team to downtown San Jose, is among those who say San Jose missed an opportunity to enhance its inner city core by not acting quickly enough when it had its chance.

"I think they could have had a lot more office space downtown now if they'd acted more and studied less," he says.

But an urban setting would be ideal for professional soccer, says Mr. Wolff, who is also managing partner of the Oakland A's baseball club. The A's have said they could contribute $50 million to a new soccer stadium under the right conditions.

Mr. Wolff called 1stAct's proposal "a fantastic idea."

"It's time someone tried to start something like this" Mr. Wolff says. "Downtown San Jose is open to a lot of innovation... but there has to be a leader involved."

The question will be whether San Jose's politicians and community at large are willing to think big, says Daniel Fenton, president and CEO of the San Jose Convention & Visitors Bureau.

Mr. Fenton has called on San Jose's existing tourist attractions -- including Cinequest, the Jazz Festival, the Tapestry Arts Festival and others -- to upgrade their product to bring in more out-of-town visitors. San Jose's hotel industry remains in the doldrums more than four years after the Sept. 11, 2001, terrorist attacks drastically cut business traffic.

"We are extremely excited by the vision," Mr. Fenton says.

While financing is important, Mr. Fenton says building momentum for a shared vision among local politicians and interest groups is the first order of business.

"If you get bogged down with the finances right now, you lose the ability to be innovative," he says.

Some 1stAct members acknowledge city officials will need to push the project but says the cultural community will need to lead the charge in selling the benefits both to the business community and the public at large.

"We are unencumbered with the past," Ms. Martinez says. "There are a lot of things happening in San Jose in the next five years and we plan to be a part of it."

Public, private funds necessary

If San Jose were to build a baseball stadium, soccer stadium, concert hall, new art museum and expand the Tech Museum -- and pay for it all with public funds -- the cost would add a half-cent to the sales tax for as much as 30 years.

The people who are talking about these projects, however, say they don't expect everything to be built at once, and they would expect that each project would have some private funding to help defray the costs. But even if the costs are much lower than the estimated $1 billion-plus, some kind of public financing would probably be necessary.

But would taxpayers be inclined to raise money for amenities like stadia and concert halls when faced with needs for roads, rails and hospitals?

To raise taxes for a specific purpose like a stadium takes a two-thirds vote. To raise taxes for general use requires the approve of only a majority of voters, but they would have to have a lot of faith in the elected leaders to spend it as promised.

For these and other reasons, those who are envisioning this reshaping of downtown haven't approached the elected officials.

"We are crafting a vision of what San Jose could be," says Connie Martinez, executive director of the Children's Discovery Museum of San Jose and co-chair of 1stAct, an organization that is bringing business and arts leaders together to plan for sports, arts and cultural developments.

Ms. Martinez said she is aware of the costs that have been bandied about for each of the projects they are thinking about but that they have not considered the total cost or how the projects would be funded.

Public financing would almost certainly involve a jump in the sales tax. Assuming $1 billion borrowed for the usual 30 years at 6 percent interest would require about $60 million a year in revenue, about the size of the deficit that San Jose faces at the end of this fiscal year.

One half penny of sales tax in San Jose currently raises $67.6 million a year. San Jose's sales tax is currently 8.25 percent and is limited by state law to a total of 9.25 percent.

"I would be extraordinarily surprised if there were public support for a tax to pay for all of those projects," says Fourth-District Councilman Chuck Reed, who is also a candidate for mayor. "People aren't going to support that when we don't have money to maintain the streets, the library hours, the day-to-day things."

Other sources of funding are more likely, says Eighth-District Council Dave Cortese, also a candidate for mayor. Those taxes would include a tax on facilities or a business improvement district and the already-established tax on hotels and motels.

"These projects are good things to look at, but you would have to get really creative for financing and look at multiple sources," Mr. Cortese said.

Developer Michael Mulcahy, another candidate for mayor, says there would need to be "a portfolio of funding mechanisms." Mr. Mulcahy, who is a member of 1stAct, says the organization "is not there yet in terms of how these things get funded. They will need to build a public-private partnership."

And there are success stories to emulate.

When the San Jose Silicon Valley Chamber of Commerce organized a trip to Denver, members came back inspired by that city's accomplishments in building a new airport, an opera house and other arts facilities, football and baseball stadium and planning for 119 miles of rail lines.

Denver is among the cities that 1stAct will study, says Ms. Martinez.

The Denver experience grew out of the collapse of the local economy in the mid 1980s after the promise of extracting oil from shale died. The real estate sector, which had been among the biggest supporters of cultural facilities, was unable to finance several much desired projects.

Business leaders convinced voters in 1989 to create a six-county scientific and cultural district that now raises $40 million a year, says Tom Clark, executive vice president of the Metro Denver Economic Development Corp.

Voters bought the idea and have twice renewed the tax, most recently last year. The money has built an opera house, science museum and supports neighborhood and community arts groups.

Voters also approved a 0.1 percent sales tax to build a $260 million baseball stadium. Now known as Coors Field, it is the home of the Colorado Rockies. But as the economy improved and the sales tax revenue increased, Denver realized it might just have enough money left over to build a new football stadium. The voters agreed, and the same tax levy also paid for most of the $280 million Invesco Field, where the Denver Broncos play. The Broncos' share was $25 million.

In 1996, Denver voters turned down a 0.4-cent sales tax for mass transit. Mr. Clark attributes that to the vague plans laid out in the ballot proposal. But in 2004, Denver voters were given a more detailed description of the project and approved the tax, which will pay for the $4.7 billion rail system.

Denver's story is one of partnership with a wide variety of community groups, Mr. Clark says. "We conspire with everybody," he said.

"We are supportive of people thinking big and making San Jose a great destination," says Bob Hines, executive vice president for public affairs.

County Assessor Larry Stone says not to count out the dreamers.

"Before you price out anything, you have to have a vision," says Mr. Stone, one of the most prominent supporters of a major-league baseball stadium in San Jose. He notes that a 1988 ballot initiative to approve the $162.5 million cost of building the HP Pavilion was a close one. "But you would be hard pressed today to find someone who admits he voted against it."

A partial list of projects

Museum of Modern Art -- Relocation to site of old Dr. Martin Luther King Jr. library on San Carlos Avenue. Cost: $65 million.

Downtown Theater renovation -- Includes new sound systems, lighting, better seating at Civic Auditorium, Montgomery Theater, California Theater, Center for the Performing Arts. Cost: $35 million.

Tech Museum of Innovation -- Expand onto site of Parkside Hall. Includes more simulator rides, interactive exhibits, video game history. Cost: unknown.

Baseball stadium -- 40,000-seat ballpark to be built for Major League Baseball team, presumably the Oakland Athletics. Cost: $400 million.

Soccer stadium -- 25,000-seat soccer stadium to be built for a Major League Soccer expansion team. Cost: $155 million.

San Jose McEnery Convention Center expansion -- Replace 80,000 square foot tent with permanent structure of similar size; renovation of existing structure. Cost $320 million.

Spartan Stadium -- New seating, new lights, new sound system, scoreboard. Cost: $40 million.

Children's Discovery Museum Expansion -- Includes "Way Back Lot" concept that would include Native American displays on city property. Cost: $4-8 million.

New Concert Hall -- New 2,500-seat music theater to handle up-and-coming acts. Cost: $80 million.

All costs are estimates. More projects could be added.

[Southernyank]

$1 billion vision for San Jose...

The whole article link

http://sanjose.bizjournals.com/sanjose/sto.../20/story1.html