Alquist Redevelopment Finances

Below are preliminary details for the Alquist Redevelopmentand are likely to change as time goes on. For any questions or concerns not addressed here, email workforcehousing@sjsu.edu.

• How much will the project cost?

  • As the planning process continues, exact cost estimates vary and a definitive number of total cost will remain contingent on the results of the contracting process with selected development partners. The project’s pro forma, the document outlining the overall finance structure for a construction project, is in development and will be included in the final plan presented to the CSU Board of Trustees in early spring 2023.

    As a tentative figure, SJSU is planning for an initial project cost estimate of $750,000,000. Note that this is an estimate in today's dollars of the cost of the project over the course of construction. It is subject to change and may differ from the ultimate cost of development.

    The project will not negatively impact academic programming or future housing projects, not use General Fund dollars, and will be a self-sustaining, off balance sheet development in addition to serving as a long-term revenue-generating site for SJSU. The project cost will be borne entirely by the selected development partner through an equity structure wherein private capital will be brought to the project. No SJSU campus reserves or CSU systemwide revenue bonds will be pursued to fund or support this project as those allocations of money will primarily go toward buildings and facilities that support the campus' core academic mission. Such other projects are outlined in the upcoming Campus Master Plan.

• Why is the project cost still an estimate?

  • In the current landscape, where uncertainty around labor, supply chain issues, inflation, and financing challenges, the cost of developing the Alquist site will continue to evolve and can escalate given a range of factors, some of which remain beyond control. Nevertheless, SJSU, in alignment with standard best practices, is preparing a set of contingency measures to keep the project within budget. 

• Why does the project cost that much?

  • As an initial, tentative figure, $750,000,000 remains an estimate of cost that is still below the norm of major capital projects of this nature in the region. In the Bay Area, construction, materials, and labor cost for housing projects average at least $850,000 per unit of housing built. For the Alquist Redevelopment, which is planned to have 1,000 units of housing, the cost per unit remains below the regional and citywide average of new construction costs. However, construction in such an expensive market to build remains costly. SJSU is committed to transparency in the building process and to maintaining a robust finance strategy to ensure the project can be completed.

• Will this impact funding for other campus programs?

  • No. Funding for the project will not come out of the University General Fund and the cost will not be borne by any existing or new fees levied on students or employees. The project will not negatively impact academic programming or future housing projects and will be a self-sustaining, off balance sheet development. SJSU remains committed to transparency throughout this project especially with regard to the impacts the project may have.

• What is the project’s finance plan?

  • The Alquist Redevelopment aims to be a fully self-supporting workforce housing project funded entirely through a private equity model. No SJSU campus funds or CSU systemwide revenue bonds will be pursued to fund this project.

    Market rate units that could likely be built will go towards offsetting initial, upfront risk to the developer.

    In addition to future leasing revenue, the university plans to explore methods at the local level to offset project costs, including some beneficial tax treatments for workforce housing units on the basis that such housing for educators and students provides outsized public benefits.

• What happens if funding falls short?
  • As standard practice with any large-scale development of this nature within the CSU, SJSU will have a comprehensive contingency plan to account for budgetary shortfalls and less-than-favorable market conditions or changes during the construction process. Student tuition and fees are not part of the contingency plan.