Publishing Date: Mar 29, 2022

Datacentres for better security

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PRESS RELEASE: Microsoft has floated preliminary plans for a big data centre complex in north San Jose on a choice stretch of empty land next to a proposed tech village that remains unbuilt, city documents show.

If built, the data centres would sprout on land that in recent years was deemed to be ripe for one of several jobs-rich tech campuses in north San Jose.

Data centres typically generate relatively few jobs, although they are crucial pieces of the global networks that store and shift electronic data.

The preliminary proposal only included a project scope to construct two five-story data centre buildings near the corner of Component Drive and Orchard Parkway, Jonathan Fox, a city planner, stated in an email sent to this news organisation.

In 2021, Microsoft paid $78.7 million for 21.3 acres where the data centres are proposed, Santa Clara County property records show. The site is primarily vacant land, although a few buildings are on the property.

The tech titan completed the land purchases through an all-cash deal, according to the public documents. LBA Realty, a big development company, sold the land to Microsoft.

The Microsoft-owned land is next to the first phase of a site at the corner of West Trimble Road and Orchard Parkway where LBA has proposed a mixed-use village of offices, hotel rooms, and retail uses.

Some uncertainty has arisen over these kinds of projects in the wake of the outbreak of the coronavirus, however.

The onset of the deadly bug has chased away business and leisure travellers, which has, in turn, gutted the hotel sector.

The aftermath of the coronavirus has raised questions about how tech companies will utilise their offices once they return in greater numbers.

In the wake of the sale of the land to Microsoft, LBA Realty retained an adjacent site that’s approved for the development of the first phase of the company’s village.

LBA’s latest proposal to the city of San Jose envisions a development of 1.28 million square feet, which would occur on the site that the veteran developer still owns. LBA has yet to begin construction, however.

The Orchard and Component site marks Microsoft’s second large purchase of empty land in north San Jose.

In 2017, Microsoft paid $73.2 million for 65 acres near Alviso along the north side of State Route 237 between Zanker Road and the banks of the Coyote River. Microsoft sought the land to build a data centre to bolster its cloud services business.

The purchase of the land in the Alviso area in 2017 worked out to roughly $1.13 million an acre.

In the most recent Microsoft deal in north San Jose, the price was about $3.7 million an acre.

Microsoft listed a number of project elements beyond the two data centres for the 21 acres at Orchard Parkway and Component Drive.

A water storage tank and a small building with pumps and chemical treatment to support the water storage tank are part of the proposal. A new PG&E electrical substation is also included, the city planning documents show.


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