SAN JOSE – Amazon.com Services, a delivery and trading unit of the high-tech giant, has purchased a site near downtown San Jose where a huge industrial hub has been proposed.
In an unexpected deal greeted by city guides, the e-commerce Leviathan bought 17.8 acres of land on 1605 S. Seventh St. near the corner of East Alma Avenue, not far from downtown and the Happy Hollow Zoo in Santa Clara County showing removed property documents.
“What is clear is that these are not just robots in a warehouse,” said San Jose Mayor Sam Liccardo on Tuesday. “Amazon is now recruiting San Jose residents, including helping displaced people in the city recruit through our Work2Future program.”
The deal with Amazon poses a potential challenge for San Jose, which has drawn a number of high-profile digital giants to the Bay Area’s largest city in recent years.
Seattle-based Amazon paid $ 59.3 million for the property, according to public records filed Oct. 9.
“This will be a great place to work,” said Bob Staedler, managing director of Silicon Valley Synergy, a land use consultancy. “Amazon is currently implementing a master plan in Silicon Valley.”
Local sources believe hundreds of Amazon employees could be employed on the site, but company numbers weren’t immediately available.
The Amazon.com services are a trading and delivery unit of Amazon.
“This is undoubtedly good news at a time of widespread unemployment and one of the many tools we will need to provide the antidote to the recession,” said Liccardo.
The seller of the transaction was a subsidiary led by William Ryan, a senior executive at Swenson, an experienced real estate developer headquartered in San Jose. Other key partners in the sales group are San Jose-based logistics and moving company leader David Bartels and Swenson CEO Case Swenson. Brian Matteoni, Senior Vice President at CBRE, a commercial real estate company, represented the seller.
Through leases and property purchases, Amazon entities have dramatically expanded their respective presence in the Bay Area in recent years.
The deals aim to create hubs for Amazon to innovate and develop new products, services and technologies, and to make the company more efficient at distributing goods and fulfilling orders.
In August, another Amazon entity, Amazon Data Services, paid $ 31.3 million to buy approximately 66 acres of Gilroy farmland.
At one point, the vendors at the San Jose location had plans for massive development in Seventh and Alma. Swenson had proposed a huge industrial center with a total area of around 365,000 square meters, according to a CBRE brochure. CBRE described the industrial center as a “high identity” building in the “expanding corridor of Monterey Road”.
It is unknown if Amazon will pursue a building this size or some other endeavor.
The San Jose deal on South Seventh Street and East Alma Avenue gives the Amazon subsidiary control of a location near three major highways: Interstate 280, US Highway 101, and State Route 87.
Additionally, the mayor said, creating a large employment center at this location with well-paying tech positions can bring these types of jobs closer to residential centers in San Jose – and potentially prevent brutal commutes to more distant technology in Silicon Valley complexes.
“This can provide better jobs for so many of our southern San Jose residents who fear the long walk north every morning,” Liccardo said.