SAN JOSE -- San Jose City Council Tuesday unanimously approved Apple's plans to develop up to 4.15 million square feet of office space over 15 years in North San Jose, fueling hope among some leaders that one day the tech giant will be headquartered there.

"Cupertino would be upset, but I tell you what -- I hope (it happens)," said Councilmember Raul Peralez.

City officials say Apple has already invested roughly one third of a billion dollars in San Jose, part of a massive office expansion in the region. The iPhone maker is expected to bring several thousand jobs into the city and pour significant revenue into San Jose coffers. The council's actions Tuesday night allow Apple to add 43 acres of land it acquired last year for $138 million to an existing development agreement approved by the city years ago. The office space to be developed sits on Orchard Parkway on both sides of Atmel Way and east of Orchard Parkway on both sides of Component Drive.

Tuesday night, Apple's senior director of real estate and development Kristina Raspe said the company plans to move employees to San Jose as early as July. City councilmembers estimated the move would involve more than 1,000 employees. The company employs roughly 110,000 people worldwide, with more than 25,000 direct employees based in the Santa Clara Valley.

Over time, Apple's San Jose project will bring about $15 million in annual property tax revenue to the successor agency, and once those obligations are met after about 20 years, the city's general fund will get up to $2 million in property tax revenue from the Apple development, officials said. In addition, the city of San Jose will get $300,000 in annual business and utility tax revenue.

Apple hasn't revealed its plans for the property or the total number of employees there, but city officials say the jobs will be related to research and development. Apple has been dinged in the past by analysts for having its bulk of sales come from the iPhone, which made up 66 percent of the company's overall revenue in its last fiscal year. As it diversifies, the tech giant has rolled out other products such as its first wearable, the Apple Watch, and an ecosystem for apps related to Internet-connected homes and health. It's also invested in areas that could spur growth, such as augmented reality.

Still others speculate that Apple is building an automobile. The effort, code-named "Titan," already had 600 employees in September, according to the Wall Street Journal. But the project may have hit a roadblock recently, since Steve Zadesky, a manager leading the project, plans to leave the company, the Journal said. Apple declined to comment on whether Zadesky is departing and has never publicly said it is building a car.

Elon Musk, CEO of Tesla Motors, said he believes Apple is trying to build an electric car, calling it an "open secret" to the BBC earlier this month. "It's pretty hard to hide something if you hire 1,000 engineers to do it," Musk told the BBC.

Industry observers figure Apple's hiring spree means that San Jose will be the spillover office for employees who don't fit into existing spaces.

"The flying saucer isn't done yet so they have to put these people some place," said Rob Enderle with advisory services firm Enderle Group, referring to Apple's "spaceship" campus in Cupertino.

"We're still studying the site to determine what is the best use for us," Raspe said.

Apple's San Jose property is in a designated industrial park, which could be used for "research and development, manufacturing, assembly testing, and offices," according to city documents.

But according to analysts, it's unlikely Apple will manufacture cars in San Jose. It would make more sense to do that in a place with cheaper land and more opportunities for financial incentives, they said.

"I don't think 4 million square feet is enough for auto production, that wouldn't make sense," said Jessica Caldwell, a senior analyst at Edmunds.com. She pointed out that Tesla has a 16-million-square-foot site in Fremont, mostly using an area of 5.5 million square feet for manufacturing.

It could be a place where employees work on prototyping an electric car, given that the car would probably be compatible with the iPhone, and San Jose is relatively close to Cupertino, Caldwell said. Apple's San Jose land and its current Cupertino headquarters are about 10 miles apart.

Regardless, the moves will have a huge impact on San Jose, where half of the city's residents commute outside the city for work, to places like Mountain View and Palo Alto. Councilmember Johnny Khamis said he hopes Apple will help keep more San Jose residents employed in the city. About 25 percent of Apple's Silicon Valley-based employees live in San Jose.

"We do have a large job imbalance here and we hope that they bring more balance to our city," Khamis said.

If Apple were to develop the full amount of office space in the agreement -- 4.15 million square feet -- it would own San Jose's second-largest share of corporate office space behind Cisco Systems' current 6.1 million square feet.

While some councilmembers hope Apple will relocate to San Jose, the company has recently expressed its commitment to Cupertino.

"Apple's been in Cupertino for nearly 40 years and we're incredibly proud to call this home. We've invested heavily, given back, and created a huge number of jobs in the area," Apple said in a statement.

Apple owns or leases 67 percent of the office space in Cupertino, according to CoStar Realty Information Inc. Some have pointed out that it could make the city vulnerable if Apple moves or faces financial adversity.

But back in the early 1980s, Apple's co-founder and CEO Steve Jobs envisioned Apple's headquarters in San Jose. At the time, Apple was leasing office space in Cupertino and Jobs took a helicopter ride over San Jose's Coyote Valley, acreage that Apple purchased but later sold. Today the land remains undeveloped.

When he stepped off the helicopter, Jobs envisioned building a futuristic campus with a tram going up the hillside.

"Steve was committed to that property the minute he landed on it," said Robert Feld, a real estate consultant at a firm helping Apple look at its long-term facility needs. Feld is now a senior managing director at Newmark, Cornish & Carey.

But the dream of an Apple Coyote Valley campus never materialized. Jobs left Apple in 1985, and his vision for a futuristic campus morphed into the "spaceship"-like structure now under construction in Cupertino.

Still, that slice of Apple history suggests to some that the company's current investment in North San Jose is a sign that it is returning home. Brian Darby, who helped build Apple IIe computers in 1981, said he's happy that Apple is opening an office in San Jose, where he currently resides. The 55-year-old teacher expressed his support at Tuesday night's city council meeting, calling Apple a "really innovative" company.

"I think it will add prestige to the area," Darby told The Chronicle.

Wendy Lee is a San Francisco Chronicle staff writer. E-mail: wlee@sfchronicle.com Twitter: @thewendylee

(c)2016 the San Francisco Chronicle

Visit the San Francisco Chronicle at www.sfgate.com

Distributed by Tribune Content Agency, LLC.

(c) San Francisco Chronicle