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County Planning On Buying, Flipping Out Former San Jose Hospital Site

November 11, 2009

The Business Journal is reporting that Santa Clara County is stepping up to acquire the 13-acre former hospital site on Santa Clara Street in Downtown San Jose. The county plans on opening a 30,000 square foot clinic on the site, land banking the balance, and then flipping it out to a developer when the market recovers.

The county is paying $28.3M for the 13-acre site which contains the old HCA-owned Hospital. The site has been sitting vacant for about 5 years now.

Santa Clara County Supervisors announced their intent Tuesday to buy the former 13-acre San Jose Medical Center site for $28.3 million to serve as a downtown medical clinic.

County officials described the purchase as a “long-term investment” and said they plan to “land bank” the bulk of the property. Once the real estate market and the economy improve, the property would be sold to a developer.

“It’s a calculated risk,” noted Supervisor Dave Cortese, “but it’s a good risk.”

If the deal closes by the end of the year, the new clinic would open at 725 E. Santa Clara St., a 30,000-square-foot building that currently houses several medical offices. Parking at the site was considered a plus.

This is interesting news to say the least, but the next developer who comes in won’t have to worry about providing a clinic, which was a sticking point, and will likely be on an easier path towards getting whatever entitlements ultimately make sense for that site.

My guess is some sort of affordable housing will make the most sense at this site. That or the next time the county gets some sort of Measure or Bond passed, it might decide it wants to spend money on building some sort of new facility on the land.

[via Business Journal]

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