Chinese Developer Raises California Stakes with 50-Storey Plan for Yahoo Site

Chinese real estate developer Genzon Group is mulling a plan to build a massive, 10.5 million square foot (975,482 square metre) mixed-use development on a site formerly owned by Yahoo in Santa Clara, California.

City officials gave Genzon’s US arm Kylli, Inc the green light to study the plan, which also features multiple new towers including an office skyscraper as tall as 50 storeys, and a residential tower of about 35 storeys. The new plan would more than triple the size of the allowed development, which is currently zoned for office space, by adding up to 6,000 residential units along with a hotel, retail space and even more offices, according to an account in the Silicon Valley Business Journal.

Kylli Inc bought the 49 acre (20 hectare) Silicon Valley property from flailing Chinese tech giant LeEco for a reported $260 million last March. The ambitious plan comes as rival Chinese developers including Greenland and Wanda are stepping back from high-profile projects in California.

Genzon Triples Down on Santa Clara Vision

Santa Clara City Council members voted unanimously to give Kylli early stage approval to study the updated vision for the project, which would still need to pass through the normal stages of planning and approval. The amended plan raises the stakes dramatically from Genzon’s original proposal, submitted last October, to construct up to 3,500 residential units along with retail facilities — in addition to the already-approved 3.06 million square feet of space.

Kylli is now looking into building another 3.5 million square feet of office space, including a tower of up to 600 feet high, and 6.1 million square feet of residential space across multiple towers. The preliminary plans also call for about 400,000 square feet of hotel space including retail, office and park amenities.

As envisioned, the sprawling development would surpass the city’s other mega-project in the pipeline, a 9.1 million square foot mixed-use development from The Related Companies that includes a tower of around 17 stories.

LeEco Fumbles Corporate Campus Dream

Web services firm Yahoo had previously won approval to build a 13-building campus on the site at 3005 Democracy Way, before selling the land and entitlements to Jia Yueting’s LeEco in June 2016 for $250 million. LeEco at one point planned to develop the site into a corporate campus – “an EcoCity that houses 12,000 employees,” as entrepreneur Jia wrote in a blog post later in 2016.

Those aspirations quietly collapsed as the Beijing-based conglomerate, known as the “Netflix of China,” became embroiled in a cash-flow crisis that prompted LeEco to lay off most of its US employees and sell off assets including its Silicon Valley dream campus.

Chinese Builder Boosts California Profile

Kylli first made a splash in the Bay Area in 2014, when it acquired the former Standard Oil Building at 225 Bush Street in San Francisco for $350 million, marking one of the biggest foreign acquisitions of US real estate that year.

The subsidiary of Shenzhen-based golf course developer Genzon followed up that mega-deal in early 2015, by backing the $47.7 million purchase of a 767,000 square foot (71,000 square metre) development site in the city of Burlingame, just south of San Francisco. The developer broke ground last February on the $300 million office, retail and life sciences project fronting the San Francisco Bay.

Genzon’s bold proposal in Santa Clara contrasts with the recent stumbles of rival mainland developers on the US West Coast. A mainland consortium led by state-owned Greenland Group is said to have bailed on a $2 billion waterfront office and biotech site in South San Francisco that it picked up in 2016.

Shanghai-based Greenland was said to have walked away from talks for a 1.9 million square foot (176,516 square metre) mixed-use development in North Hollywood, California. And mall builder Dalian Wanda Group has struggled in California, with US development partner Athens Group said to have withdrawn from a $1.2 billion luxury condo-and-hotel complex in Beverly Hills.