Hines Data Center Plan Targets Downtown San Jose Block

Hines has submitted a proposal to the City of San Jose to redevelop The Pavilion at 150 South First Street, combining a revitalization of ground-floor retail spaces with a substantial expansion of the building's data center capacity. The plan seeks to increase the data center's power from 5 megawatts to 40 megawatts, addressing a critical need for energy-intensive computing within the region. This dual-purpose project, termed Paseo Place, aims to create 11 new retail spaces while modernizing the existing 179,800-square-foot complex.

The proposal carries significant policy implications for San Jose, particularly concerning its ability to accommodate rising energy demands from data centers. Pacific Gas and Electric (PG&E) materials highlight broader transmission and distribution capacity pressures in the region. The city is evaluating the project through its Innovative Project Pathway Program, a mechanism established by the Mayor and City Council for developments offering extraordinary public benefits or those not conforming to existing zoning standards. Concurrently, the City of San Jose is in the process of developing uniform data-center standards to address crucial issues such as energy sourcing, water consumption, air quality, and backup generators. The project's financial cost and construction schedule have not yet been disclosed, and its approval will test San Jose's approach to balancing downtown activity with the infrastructure and environmental demands of a large data center.