The campus at the top of Harry Road has seven buildings and more than 500,000 square feet of space, on 35 acres surrounded by more than 500 acres of grassland that cattle still graze. IBM moved its Almaden research operation there in 1986. The lab became known for the hard-disk drive, the relational database, DVD and Blu-ray encryption, and brain-inspired computing, according to IBM's 30th-anniversary announcement.
In 2026 the site picked up a new zoning designation and a buyer, and it has prompted a lot of questions. Most of those questions are about the zoning. A 25-megawatt power station that IBM left on the hilltop will likely shape what happens there more than the zoning does.
What the August vote changed on paper
On Aug. 18, 2026, the San José City Council voted 9 to 2 to rezone the property. Councilmembers Rosemary Kamei and Pamela Campos voted no and asked to delay the vote so the community could weigh in further, San José Spotlight reported. The city staff report splits the 600.16-acre site into two zones.
| Portion of 650 Harry Road | Approximate acreage | New zoning district |
|---|---|---|
| Developed campus with seven buildings | 35.097 acres | Industrial Park |
| Surrounding hillsides | 565.063 acres | Open Space |
| Santa Teresa County Park, to the east | Separate 1,673-acre County park | Not part of the rezoning |
City officials said at the meeting that the vote did not approve any specific permit or redevelopment on the site, SiliconValley.com reported. Councilmember George Casey, whose District 10 includes the site, said much the same thing from the dais: "We're not actually having a conversation about data centers right now. This is a step toward that, I want to acknowledge that."
IBM announced in July 2025 that it would close the Almaden hub, the Mercury News reported. IBM decided to shift those workers to its Silicon Valley Lab at 555 Bailey Road, on the edge of Coyote Valley, and Cushman & Wakefield has been marketing the property.
The buyer, and what it has said so far
On Sept. 29, SiliconValley.com reported that an affiliate of Blackstart Digital had agreed to buy the campus and expects to close before the end of the year. Blackstart Digital's managing partner is tech entrepreneur Chadwick Manning, and the company's work includes turning older sites into modern tech hubs. The company said it plans to keep the existing buildings as they are. It listed possible uses including advanced research and development, startup incubators, academic partnerships and quantum computing.
The company's statement to that outlet included a line about the hillsides:
"We have no intention or plan to develop the surrounding open space. Our team has local roots, and we know how much the trails and hillsides matter to this community."
The same article includes the sentence that matters most for what happens next. The campus already has several generations of data center facilities, and Blackstart Digital said, "We intend to expand capacity, subject to power availability."
As of Oct. 1, the city said no development application had been filed. The filing it had received in June was a request to complete environmental review for the rezoning, according to San José Spotlight. Documents filed June 2 list July 2028 as the target for a hearing date and possible decision on environmental review.
Why the power station matters more than the zoning label
Much of the concern at the August meeting was about Senate Bill 131. The 2025 state law created an exemption from the California Environmental Quality Act for projects made up only of an "advanced manufacturing" facility on land zoned exclusively for industrial use. The exemption does not apply on natural and protected lands. The bill text is public, and the city's environmental review staff explained its reach during the meeting.
According to the Aug. 18 meeting transcript, staff described the exemption as covering a narrow group of projects, such as nanotechnology, biotechnology, and research and development that involves manufacturing. Staff said it does not cover offices, warehouses or data centers, and that a data center on the site would need its own full environmental review. Blackstart Digital told SiliconValley.com that any specific proposal would go through full CEQA review as appropriate.
That brings the focus back to the power station. San José's proposed citywide standards, released Oct. 9, create two new categories in the Municipal Code: Large Load Data Centers and Large Load Research and Development Facilities. Both are defined as facilities that draw 20 megawatts or more. The power station IBM installed is rated at 25 megawatts. Here is what the city's news release says those facilities would face, in the draft as it now stands:
- Cooling with 100% recycled water from the South Bay Water Recycling system, or a low-water technology such as closed-loop or air-cooled systems. Open-loop cooling with potable water would be prohibited.
- 100% carbon-neutral electricity, which enrollment in San José Clean Energy satisfies.
- EPA Tier 4 backup generators, with testing limited to 25 hours a year on weekdays between 8 a.m. and 5 p.m.
- Annual noise monitoring near homes, plus annual third-party verification of actual energy and water use, with an audit and required improvements if use exceeds the levels assumed in the project's environmental clearance.
- Public notice out to 1,500 feet.
- City Council hearings for both land-use and CEQA appeals on projects over 20 megawatts.
The city calls these provisions a draft that could change based on community feedback. At the Oct. 15 community meeting, residents pressed for a pause or moratorium, and the city continued with targeted regulation rather than an outright ban, the Mercury News reported.
Two calendars running at different speeds
The city's schedule puts final votes on its standards in December, more than a year and a half before the July 2028 target date in the buyer's June filing.
- Nov. 18, 2026: City staff present the final proposed Large Energy Projects Uniform Development Standards to the Planning Commission.
- Dec. 8, 2026: Tentative City Council presentation and first reading.
- Dec. 15, 2026: Tentative second reading. The policy and ordinances take effect 30 days later, which would be mid-January 2027 if the schedule holds.
- By the end of 2026: Blackstart Digital's affiliate expects to close on the purchase.
- July 2028: Target date in the June filing for an environmental review hearing and possible decision.
No development application was on file as of Oct. 1. The state has also changed the rules. In September, Governor Gavin Newsom signed seven bills on data centers that cover ratepayer protection, transparency on water use, and limits on exemptions from environmental review, according to the city's release.
The hillsides: zoned Open Space, with no easement
The open space is where the August decision is least settled. Open Space zoning describes how the 565 acres can be used under current city code. It is not a conservation easement. In 1999, a memo from then-Councilmember Dando directed city staff to pursue an easement on the hills. At the August meeting, staff said an easement requires both parties to agree, and that with no easement on record, they could only assume no agreement was reached. When Councilmember Campos asked whether staff would make sure the next owner knows the community has asked for an easement, staff said yes.
Alice Kaufman, policy and advocacy director for Green Foothills, said the surrounding open space raises the stakes of any industrial development at this site more than most. "Part of the problem is that we don't know what could be proposed there," she told San José Spotlight.
Santa Teresa County Park borders the site to the east and keeps its own boundaries. It covers 1,673 acres, has more than 17 miles of unpaved trails, and includes the Bernal-Gulnac-Joice Ranch historic site, according to Santa Clara County Parks. Blackstart Digital said it intends to work with the city, neighbors, conservation groups and open-space organizations through a full public process as its plans take shape. The next public hearing on the citywide standards is the Nov. 18 Planning Commission meeting.
This post is general information about public land-use decisions, not legal advice. Anyone weighing how these rules affect a specific property should confirm the details with the city and a qualified professional.
If you own a home in Almaden Valley and want to know how changes on the hilltop could figure into your property's value, Tenczar Team follows these hearings closely and can walk you through it.
