San Jose Council Upholds Data Center Permit for Nvidia-Leased North San Jose Building

by Chris Renois

The San Jose City Council has turned down an appeal and kept in place a city permit that lets a North San Jose research building operate as a data center. Nvidia leases the building at 300 Holger Way. With the vote, the city has finished its review of the permit. The decision also comes as San Jose works on citywide rules for data centers, and residents can weigh in on those rules at public hearings in November and December.

What the council decided

San José Spotlight reports that the council voted unanimously on Tuesday, October 20, to reject the appeal. Councilmember Peter Ortiz was absent, and Vice Mayor Pam Foley recused herself because of a financial conflict of interest. San Jose Inside, carrying a CalMatters report, gives the count as 8–0. The Real Deal, citing the Mercury News, says three councilmembers did not vote and that Foley said she has a financial interest in the tenant.

The appeal targeted a decision city planners made on July 8. That decision approved a Special Use Permit to run a data center using up to 20 megawatts of power inside the existing research and development building. According to the City of San José's planning website, data centers in the city are subject to a public hearing.

The site: size, location and scope

Location: 300 Holger Way in North San Jose, just south of Highway 237, in Council District 4. Councilmember David Cohen represents the district (San José Spotlight).
Size: A building of about 97,800 square feet on a 4.86-acre property, according to Data Center Dynamics, which reviewed the planning documents.
Owner and tenant: Real estate investment firm Menlo Equities owns the building. Nvidia began leasing it in December 2024, and the lease runs through 2035 (Data Center Dynamics, The Real Deal).
What the permit allows: Only work inside the building, including installing data racks. Planning documents say the project would not change the outside of the building or add to its footprint (San José Spotlight, Data Center Dynamics).

We could not confirm a current construction schedule. Planning documents described in Mercury News coverage, republished by Industry Insider in December 2025, said data center work would begin in December 2026 and finish by July 2027. Since then, the owner has described the permit mainly as covering research work that is already happening in the building, so that earlier schedule may no longer apply.

Why the permit was appealed

The appeal came from Citizens for Responsible Industry, a labor-backed group, along with residents who share its concerns. They argued that the project should have gone through a full environmental review. They also said the facility's possible noise and air pollution could affect people living nearby. The group's attorney, Kelilah Federman, told the council that a 20-megawatt facility would need major electrical and cooling upgrades that the city did not consider (San José Spotlight).

City planners answered that no further review was needed because the permit covers only interior changes and allows no new construction. City officials also said the owner would need a separate permit before adding new equipment to the site.

What the owner says the building is used for

Erik Schoennauer, a land use consultant for Menlo Equities, told San José Spotlight that Nvidia has run a chip-testing lab in the building for years. He said the lab includes a data hall supplied with 8.5 megawatts of power, and that Nvidia plans to keep running it. Menlo Equities says it applied because the city defines "data center" very broadly, and the testing work could fall under that definition. Menlo Equities partner Jane Vaughan said Nvidia has spent about $100 million remodeling the building for testing and research (San José Spotlight, The Real Deal).

Councilmember Cohen agreed that the city's definition needs updating. He said the building is not a data center in the usual sense and that the city code's definition is "very strange." The city's planning website now separates the two: data centers mainly rent server space to other companies, while "large energy-use projects" use a lot of power for a company's own work.

Citywide data center rules: key dates

San Jose Inside reports that the council has decided against a temporary moratorium on data centers. Instead, the city is writing permanent standards for data centers and large energy-use projects of 20 megawatts or more. The draft schedule:

November 18: Planning Commission review
December 8: City Council hearing and planned vote

The deadline for public comments to appear in the official staff reports was October 22. Residents can still send letters and speak at either hearing. Meanwhile, Oakland, San Francisco and Gilroy have recently adopted temporary moratoriums on new data centers.

What this means for homeowners, buyers and sellers

For people living near Holger Way, the permit allows no outside construction or building expansion. City officials say any new equipment would need its own permit. Several other data center applications are pending in North San Jose. The city's list includes 2549 Orchard Parkway and 350 W. Trimble Road, both still under environmental review.

Follow the hearings. The November and December meetings will set rules on issues like water use, energy use and community benefits.
Look up nearby projects. The city's planning website lists data center applications. You can find details for each one by file number at SJPermits.org.
Buying near North San Jose's industrial areas? During your contingency period, check the permit history and pending applications nearby. If you have questions about a specific property, an attorney can help.

We'll keep watching how San Jose's data center rules develop and what they mean for homes in North San Jose and the rest of the city.

Sources

Thinking about buying or selling in the Bay Area? Chris Renois can walk you through how these changes affect your home and your plans. Call or text (650) 512-9817, email chrisrenois@therealexperts.com, or get a free home value estimate.

This article is general information for Bay Area homeowners and buyers, not legal, tax or financial advice. Laws, rates and deadlines change; please confirm details with the original sources linked above or a qualified professional. Chris Renois, California DRE #02030130.