Communications Hill – KB Home Snaps Up First Piece of Huge San Jose Infill Development Site
Silicon Valley Business Journal
May 5, 2015
The final build out of Communications Hill, one of the largest and longest-running master-planned development projects in San Jose, is finally coming into view.
KB Home last week closed on a 9.8-acre chunk of land that will form the start of the massive project’s next phase — 154 units that will be joined by many hundreds more over the next 10 years. The first model homes, a mix of townhomes and small-lot single-family units, are expected to start construction this fall.
The deal is a major inflection point in the 35-year history of the Communications Hill plan, which called for up to 4,000 residential units, a 50-acre industrial park, a small retail center and wide swath of open space on the 400-foot-high hill. Public records show KB paid about $19.15 million for the site, or roughly $124,000 per unit.
“This was a huge milestone,” said Rob Bettencourt, general partner of MTA Properties, the family trust that owns most of the land on Communications Hill.
Communications Hill is one of a handful of large, master-planned Silicon Valley development sites in infill locations that are finally getting built out as strong home prices tempt capital to place bets on these often complicated, pricey projects. Others include Wilson Meany and Stockbridge Capital’s Bay Meadows in San Mateo, on a former racetrack; KB Home on the San Jose Flea Market site near the under-construction Berryessa BART station; and Lennar Corp. on a 111-acre site next to the Warm Springs BART station in Fremont, also coming soon.
Communications Hill isn’t a redevelopment — the remaining land has been largely untouched since Manuel T. Azevedo arrived from Portugal basically penniless, bought a cow, and started the American Dairy Co. Cows grazed the property while a creamery in downtown San Jose processed the milk. (Now the hill sprouts microwave towers on its summit, visible from miles around on the valley floor.)
The Bettencourt family, descendants of Azevedo, has been working with the city of San Jose since the 1980s on the hill’s development, but construction didn’t start until the early 2000s. That’s when KB Home erected Tuscany Hills, a 760-unit project. SummerHill Homes later built about 400 homes on adjacent Dairy Hill.