A large chunk of Santa Clara’s year-end budget surplus will go toward relocating city hall.
At its last meeting of the year Dec. 17, the Santa Clara City Council funneled $41.3 million into various reserves.
A good year in sales tax revenue contributed $10.54 million. Another $4.14 million in higher-than-expected hotel tax also added to the surplus. More than $13 million in lower-than-expected expenditures gave the council a large pool of money to allocate.
Kenn Lee, the city’s finance director, laid out how his office proposed using that money.
Lee’s office suggested adding $13 million to the capital budget reserve, $4.6 million to the city’s pension trust, $1.3 million to its budget stabilization and setting aside $1 million to pay bond project equipment. Finally, $20.35 million was earmarked for civic center relocation.
Council Member Suds Jain said squirreling away for relocating city hall “makes perfect sense.”
But not everyone agreed.
Mayor Lisa Gillmor challenged whether setting aside money to fund the city hall relocation was prudent. She said some of the excess money could have gone to fund council priorities. Further, she said, using surplus money to relocate city hall without first seeking public input is a bad look.
“It makes it look like we have made decisions before we have made any decisions, and I think the perception is pretty bad on that,” she said.
Council Member Kevin Park agreed, calling the allocation “premature.”
The comments echoed those from members of the civic group Reclaiming Our Downtown.
Mary Grizzle, one of the group’s leaders, said the allocation quietly moves the city toward a downtown city hall without a clear council policy direction.
Doing so doesn’t lay out what sites are being considered or how it aligns with the downtown master plan, she said, adding that it turns land-use decisions into “budget mechanics instead of transparent policy discussion.”
“We have seen this move before. Downtown was hyped long ago. Promises were made. Then, the civic heart of the city was removed, and Santa Clara paid for it for decades,” she said. “This community remembers, and we will not allow it to happen again.”
Another of the group’s leaders, Dan Ondrasek, said the civic center owes its existence to a “historic betrayal.”
In the late 1950s, he said, millions of dollars were secured to rebuild the downtown, only to get diverted and eventually used to demolish the downtown.
“Our downtown’s destruction was the down payment for our current civic center,” he said.
City Manager Jovan Grogan said nothing in the allocation determines a new location. He said the city will conduct extensive public outreach before making any decisions. The allocated money can also be moved from one reserve to another should the council decide it wants to use it for something else, he added.
But Gillmor didn’t budge, insisting she was concerned about the perception of the council already having made a decision. She favored putting the money in the land sale reserve.
Toward that end, Park suggested tweaking the language but said he was uncomfortable with the money going into the land sale reserve, which has “a lot of questionable uses.” Park suggested removing “relocation” from the fund to illustrate what the money will be used for.
However, Gillmor said the change was not substantive enough, saying it is “the same thing.”
Park sniped back.
“You are saying perception is everything, and here you are complaining,” Park said to Gillmor.
The budget, along with the allocations, passed in a 5-1 vote, with Gillmor dissenting.
Construction Likely to Disrupt Fireworks at Central Park
The council also approved a contract for work at Central Park.
The $5.66 million contract went to Guerra Construction.
Craig Mobeck, the city’s public works director, said some of the improvements are necessitated because of a settlement with a resident.
They include improvements to the pavilion parking, Americans with Disabilities (ADA) accessibility, walkways and lighting. Additionally, they will add a new entrance, access and parking areas, adding 31 new parking stalls, EV charging, landscaping, walkways to the Magical Bridge playground and Veterans memorial.
“I am really concerned that we’re taking away a lot of park space for essentially driveway and walkway when I feel that that area worked really well by itself,” Park said. “I don’t like removing green space. I don’t like removing space for people to put in roads or parking structures.”
Damon Sparacino, the city’s parks and recreation director, told the council that, while the park can still host the city’s July 4 celebration, the construction could necessitate some changes.
The celebration has been held at Mission College the past couple years, but the city plans to hold the jubilee at Central Park next year.
Gillmor suggested conducting a survey to see if residents want the celebration to be held at Mission College or the park, which she called the “heart and soul of our community.”
Construction will take place between February next year and fall 2027.
The contract passed in a 5-1 vote, with Park dissenting.
Vice Mayor Kelly Cox was absent.
The first regularly scheduled meeting of 2026 is Tuesday, Jan. 13 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.
Members of the public can participate in the City Council meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1 (669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov
Contact David Alexander at d.todd.alexander@gmail.com
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