The Big Picture
Hines is proposing to breathe new life into the long-struggling Paseo de San Antonio by reopening 11 vacant storefronts, adding restaurants and retailers, improving the pedestrian environment, and modernizing the building at 150 South First Street. But the economic engine behind the project is the reactivation and major expansion of a dormant data center, increasing its power capacity from roughly 5 megawatts to 40 megawatts.
The proposal is seeking approval through San José’s Innovative Project Pathway Program because it does not fit neatly within existing General Plan and zoning standards. That makes this more than a building renovation. It is also a test of how flexible San José is willing to be when a project combines a high-energy technology use with significant investment in downtown retail and public-facing amenities.
Why it matters
Downtown San José has struggled for years with vacant storefronts and inactive ground-floor spaces, particularly along Paseo de San Antonio. This proposal creates a potentially important model: using the economics of a data center to support the reopening of retail spaces that might otherwise remain vacant.
The location also matters. The Paseo sits next to San José State University and has a built-in population of students, residents and downtown workers that could support restaurants and other active uses if the spaces can finally be brought back to life.
But the project also raises a larger policy question for San José. As the city increasingly embraces data centers for their tax revenue, will high-energy uses become part of the financial equation for revitalizing difficult downtown properties? How the city handles 150 South First Street could help establish a precedent for where data centers belong, what community benefits should accompany them, and how much flexibility the city is willing to provide when those benefits include activating downtown streets.
