ICE investment ban fails 4-4 in San Jose; study ordered instead

San Jose
City Council Meeting
March 24, 2026

TL;DR

• A proposal to bar new city investments in Alphabet, Amazon, and Microsoft over ICE ties failed 4-4. The council instead accepted the staff recommendation and ordered a study of what other cities have done. Two members recused.
• About 60 residents spoke on the investment item, the longest stretch of public comment in the meeting.
• The council cleared $6.1M in tax and fee waivers for Gateway Tower (220 affordable units) and the Bank of Italy office-to-residential conversion (109 units), both downtown.
• El Paseo de Saratoga received $3.7M in waivers for a 772-unit, two-tower project. A roughly $13M in-lieu fee will fund a separate 100% affordable project at Canoas Garden Avenue.
• The council granted a franchise to LS Power Grid California to build out a nearly $2 billion grid project across six districts, co-located with PG&E at Metcalf Station.

What happened

1. ICE-linked investment ban fails 4-4; council orders study of peer cities
   1. About 60 people came down to City Hall to tell the council what to do with the city's investments in Alphabet, Amazon, and Microsoft. Councilmembers Ortiz and Kamei wrote a memo asking the council to let current investments in the three companies run out, and not buy any new ones, because of the companies' ties to ICE. That failed 4-4, with Cohen, Tordillos, Mulcahy, and Casey voting no. A second motion to just accept what staff recommended also failed, 3-5. Councilmember Candelas then put forward a third version: accept staff's recommendation and ask the administration to find out what other California cities have done on the same question. That one passed unanimously. Vice Mayor Foley sat the whole item out because she owns Amazon and Microsoft stock; Councilmember Doan recused too. Mayor Mahan was absent.
   2. What this means for you: The city's investment policy did not change. When Finance staff checked the city's current bond holdings against federal records of ICE contracts, only Microsoft showed up directly. Finance Director Maria Öberg estimated the city would lose $3 to $5 million a year if it stopped buying corporate bonds entirely.
2. Council waived about $6 million in taxes and fees for two downtown housing projects
   1. The council cleared the path for Gateway Tower at 470 South Market Street, a 15-story building with 220 apartments, all affordable up to 70% of the area's median income. Rents will run from about $1,000 a month at the lowest income tier to about $3,600 at the highest. The same vote also waived fees for the Bank of Italy at 12 South First Street, where the old downtown landmark will be converted from offices into 109 apartments. The vote was 9-0; Mahan and Campos were out.
   2. What this means for you: Gateway Tower expects to start construction in May, after pulling together more than $70 million in city, county, and Housing Authority money. The Bank of Italy conversion is on track to start in April.
3. El Paseo de Saratoga: $3.7M in waivers for 772 apartments and a separate affordable project
   1. Two towers, 398 units in one, 374 in the other, will go up at 1777 Saratoga Avenue, along with a park and 30,000 square feet of shops. The council waived about $3.7 million in construction taxes. The developer, Sandhill Property Company, will still pay roughly $13 million in fees the city normally collects for affordable housing, and that money will fund a separate 100% affordable project at the Cathedral of Faith site on Canoas Garden Avenue in District 9. The El Paseo project itself will include 39 affordable apartments on site. The vote was unanimous.
   2. What this means for you: The developer told the council the waiver lets them pull a building permit by May and start building this summer. The $13 million in fees pays for affordable housing across town.
4. LS Power gets the green light to build a nearly $2 billion power project
   1. The council granted LS Power Grid California the right to run electrical transmission lines through city streets. A senior vice president from the company told the council the franchise unlocks close to $2 billion in grid upgrades. The new lines will share space with PG&E at the Metcalf Station, which is how the city kept the project out of Coyote Valley. The vote was 10-0 and covers Districts 2, 3, 4, 6, 7, and 10. The state already did the environmental review.
   2. What this means for you: More power capacity is coming online across south and east San Jose. Sierra Club and youth climate speakers warned that the new capacity will likely feed future data centers in Alviso, and asked the council to hold the vote until those impacts were studied. The council did not.
5. Housing permits running well behind goal, and behind peer cities
   1. San Jose is supposed to permit 62,200 new homes by 2031 under the state's housing targets. In 2025, the city hit about 34% of its share for the year. Councilmember Tordillos pointed out that San Diego averaged about 68% of its goal in 2023 and 2024, and 56% in 2025.
   2. What this means for you: The city is well off pace. Staff said keeping up with new state housing laws, like SB 79, which the council finalized on the consent calendar at this same meeting, has slowed work on the city's own housing programs.

What residents brought up

• About 60 people signed up to speak on the investment policy item, with public comment limited to one minute each. Speakers in favor of the Ortiz-Kamei memo cited specific ICE incidents in San Jose, including a gun pulled at a Southside building, and asked the council to act on the city's sanctuary status. The Council on American-Islamic Relations, Students for a Democratic Society at San Jose State, the Immigrant Protection and Empowerment Network, Community Service Organization San Jose, Sierra Club Loma Prieta, Showing Up for Racial Justice, San Jose Peace and Justice Center, and Jewish Voice for Peace spoke in favor.
• Speakers opposed cited the $3 to $5 million estimated annual revenue loss against the city's $56 million projected deficit. They also cited the city's longstanding 1979 policy reaffirmed in 2016 against taking foreign policy positions, and concerns about local antisemitism. The Jewish Community Relations Council of the Bay Area, Jewish Silicon Valley, and the Jewish Democratic Coalition of the Bay Area spoke in opposition. An Iranian-American resident also spoke against the proposal.
• On the LS Power franchise, Sierra Club Loma Prieta's conservation coordinator and a youth climate commenter asked the council to defer the vote pending environmental review of likely future data center loads in Alviso. They cited CalEnviroScreen's ranking of Alviso among the region's higher-burdened areas.

Also happened

• Ordinance 31315 adopted, extending the Soft Story Seismic Retrofit Ordinance compliance deadline from April 1, 2026 to April 1, 2027.
• Ordinance 31316 adopted as the final implementation of SB 79 within San Jose, excluding certain employment areas from SB 79 provisions.
• Resolution 26-61 approved a $1,240,000 easement agreement with LS Power Grid California across San Jose-Santa Clara Regional Wastewater Facility lands.
• Resolution 26-63 accepted $6,585,489 in Permanent Local Housing Allocation grant funds from California HCD.
• Resolution 26-65 declared the city's commitment to opposing the coercion of institutions of higher education.
• The council accepted the city auditor's report showing 88 open audit recommendations, the lowest level in over a decade.
• The council accepted a status report on the $1.2 billion regional wastewater facility capital program, with a similar workload projected over the next 10 years.
• Resolutions 26-69 and 26-70 set a public hearing for May 12, 2026 to formally establish the East Village Business Improvement District.

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