The property, a street-level parking lot on Second Street next to Fountain Alley, is owned by SJRA. However, the agency is under a 10-year agreement with San Jose Parking to exclusively negotiate with the company in developing the property. While negotiations have never been fruitful, San Jose Parking has paid the city monthly installments totaling $1.5 million in order to maintain the right as the exclusive developer.
Despite the agreement, the SJRA had been negotiating with Palladium Co. for a $1 billion, 3.7-million-sf mixed-use project on the site and now is in negotiations with L.A.-based CIM Group are in progress. Of course, city officials feel they need to be able to give any new developer certain developmental rights for successful negotiations, including those of Fountain Alley.
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