Street-level view of a data center complex on Charlotte Drive between Lexington Avenue and Raleigh Road in South San Jose, concept. (Gensler)
SAN JOSE — A data center could rise on part of a long-time San Jose tech campus, according to a proposal that offers fresh evidence that the boom in these advanced computing hubs is still in its early stages as the artificial intelligence era unfolds.
The digital complex would be built along Charlotte Drive between Lexington Avenue and Raleigh Road on a section of the Western Digital tech campus in South San Jose.
A growing number of property owners and real estate developers have begun to float proposals for data centers in North San Jose, the Alviso district, and in South San Jose as they seek to slake the tech industry’s thirst for the cutting-edge hubs.
The new proposal involving the Western Digital campus is being floated by Menlo Equities, an experienced real estate firm that would develop the data center.
The data center would total approximately 444,400 square feet. The project would include an on-site substation. The computing hub would require 99.7 megawatts of total power and would include 72 megawatts of critical backup power.
Menlo Equities has also proposed the development of some open space at the corner of Charlotte and Lexington that would be accessible to the public, the development plans show.
The data center would be located on a site that’s next to or near residences, shops and restaurants.
Despite that proximity, a data center would be consistent with the long-time zoning for the tech campus, noted Erik Schoennauer, a San Jose-based land-use expert who is consulting with the developer on the project.
“This site has been designated for industrial use for many decades,” Schoennauer said. “The proposed project is consistent with the city’s industrial zoning districts.”
Skepticism has jolted proposals for data hubs in some Bay Area communities such as Oakley, Pittsburg, Brentwood, Gilroy, Hayward and elsewhere around the country.
Opponents in some communities and elsewhere around the country have raised concerns that data centers might produce undesirable impacts on the environment, consume too much water and pose health hazards.
In sharp contrast, San Jose political leaders appear to be intrigued by the prospect of new data centers.
A March 2026 report prepared for San Jose Mayor Matt Mahan and the other members of the City Council offered reasons why the Bay Area city appears to hunger for data centers.
One key bottom line: Data centers can produce streams of cash for San Jose’s city coffers.
“A 50- to 99-megawatt data center, once fully ramped up, could generate between $3 million and $6 million in unrestricted annual revenue for city services,” Deputy City Manager Manuel Pineda wrote in the report.
Plus, data centers can process their strings of proverbial 1s and 0s in an unassuming and nondescript fashion.
The city staffer noted that data centers require limited public services once they are operational. The report added that data centers do not add traffic and do not generate school and public safety demand at the scale of residential projects.
“The city benefits from capturing economic activity that would otherwise be located in other states or regions,” the city staff report stated. “Retaining these projects locally allows San Jose to share in the financial upside of the digital economy.”