SAN JOSE — Santa Clara County’s Housing Authority is contemplating the purchase of a big office building in north San Jose that was once occupied by the now-defunct Silicon Valley operations of China-based tech firm LeEco.
The potential interest of the county housing agency in a vacant office building at 3553 N. First St. in San Jose as its future headquarters has come to light in public documents.
Initially, the county Housing Authority anticipated it would be the principal office occupant of a mixed-use village in downtown San Jose at 675 E. Santa Clara St. that would include offices, homes, and retail.
Cost considerations, however, have prompted the county agency to cast about for a less expensive alternative, which in this instance, appears to be the purchase of an existing — and empty — building at the corner of North First Street and Rio Robles in north San Jose.
“The building at 3553 N. First Street meets the established criteria to serve as Santa Clara County Housing Authority’s new main office,” according to a staff memo prepared for a recent meeting of the agency’s board that was prepared by Sharon Jones, deputy executive director of the Housing Authority.
The North First Street Building, located alongside the light rail tracks, totals 86,100 square feet, the county documents show. Brokers Joe Kelly and Jon Mackey of Newmark, a commercial real estate firm, have been marketing the office building.
The building once was occupied by the Silicon Valley operations of China-based LeEco, a formerly high-flying tech and consumer electronics giant that nose-dived in 2017, chopped at least 300 jobs in San Jose, and eventually shut the doors of its North First Street offices.
In 2017, an affiliate of China-based Han’s Holdings paid $36.2 million for the 3553 N. First St. office building. LeEco was still the tenant in the building when Han’s purchased it.
In May 2020, a county Housing Authority analysis determined that the cost of developing a brand-new office building and garage at 675 E. Santa Clara St. as part of a mixed-use village would be around $90 million.
The county housing agency’s board authorized the authority’s executive director “to negotiate and execute a purchase and sale agreement with Han’s San Jose Hospitality for the property at 3553 N. First Street in an amount not to exceed $37.35 million,” a county document stated.
On Sept. 24, the Housing Authority’s board authorized negotiations for a possible purchase agreement.
North First Street could make sense as a new headquarters for the Housing Authority, which currently is in cramped quarters on West Julian Street in downtown San Jose.
“It’s far cheaper for the Housing Authority to buy an existing building rather than develop a new one,” said Bob Staedler, principal executive with Silicon Valley Synergy, a project strategist. “Being on the light rail line can help meet climate goals.”
Long-term, the North First Street location could prove to be difficult for people who have to drive long distances.
The county’s potential purchase of the offices on North First Street leaves the prospects for the downtown San Jose village development somewhat unclear.
“If the Housing Authority moves to the north San Jose location, it might be out of sight, out of mind for the downtown project,” Staedler said.