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Downtown San Jose is poised to boom — but challenges loom: developers



Downtown San Jose is poised to boom — but challenges loom: developers

SAN JOSE — Downtown San Jose is in an excellent position to boom, two busy developers told a gathering on Thursday, adding they expect that a top-to-bottom renovation of a historic tower should be finished by sometime in 2022.

Despite the bright prospects for downtown, key challenges loom, developers Gary Dillabough and Jeff Arrillaga said during a presentation and question-and-answer session hosted by The Silicon Valley Organization. Dillabough and Arrillaga are partners and principal executives with San Jose-based development company Urban Community.

Urban Community has teamed up with Westbank, a Canada-based developer with a global reach, to build several big projects that together would bring dramatic changes to the skyline of downtown San Jose.

“Downtown San Jose is primed right now,” Arrillaga said during the meeting on Thursday.

One of the major reasons: On the Peninsula and in the South Bay, San Jose is the best place for big tech companies to find elbow room in an urban setting besides San Francisco.

“Why is San Jose going to expand and grow this time around? For tech companies to grow at scale, there is nothing else between here and San Francisco other than San Jose,” Arrillaga said.

It’s crucial that city officials and business leaders do all they can to create a vibrant and inviting atmosphere that will help entice tech companies and their workers to downtown, Dillabough said.

Crime and homelessness issues are among the big obstacles for a successful downtown, the developers said. City leaders and police officials are taking steps to address these problems, they added.

“People want a cup of coffee, they want a great lunch,” Dillabough said. “We want to be sure that when they are here, we have a great user experience.”

The Westbank and Urban Community alliance is planning several projects in downtown San Jose. Among these is the wide-ranging revamp and restoration of the Bank of Italy historic office tower.

The renovation is underway and should kick into high gear by sometime in September, Urban Community’s partners estimated.

“We will be done with Bank of Italy in 12 to 14 months,” Dillabough said during the question-and-answer segment of the event.

The iconic tower will add an eye-catching feature: a curving staircase that will be attached to the south side of the Bank of Italy building.

Westbank and Urban Community are planning several other major projects in downtown San Jose:

— The Energy Hub. The Fountain Alley parking lot at 35 S. Second St. This project would feature an eye-catching curving building with a 10-story atrium. Homes and offices will be the tower’s components.

— The Orchard. The Valley Title site at 300 S. First St. and Bo Town property at 409 S. Second St. would add homes along with offices, retail, and restaurant spaces.

— Arbor, a site next to the Davidson Building at 255 W. Julian St., would add a connecting office and retail tower.

— Park Habitat, 180 Park Ave. This project consists of 1.2 million square feet of office, retail and expansion space. Park Habitat would feature a sunken garden and elevated green areas to connect office workers and pedestrians with nature.

— Westbank and Urban Community this year bought a 1.6-acre site near the corner of Terraine Street and Bassett Street where a big residential project has been approved.

So far, the development alliance controls or owns about 20 acres in downtown San Jose, according to Dillabough. But Dillabough and Westbank aren’t done with their efforts.

“We hope to get a little more than that,” Dillabough said.

Besides Westbank and Urban Community, other major developers are either constructing new office towers, or are actively planning them. Jay Paul Co., Sobrato, Boston Properties, DiNapoli are in this group.

Smaller developers such as Urban Catalyst and Acquity Realty are pushing ahead with their own projects.

Plus, Adobe is finishing up a new office tower to greatly expand its downtown headquarters campus.

Google intends to develop a new transit-oriented neighborhood called Downtown West, a development of offices, homes, restaurants, shops, and hotel facilities near the Diridon train station. The search giant could employ up to 25,000 people in the mixed-use village.

Both Arrillaga and Dillabough noted that the corner of First Street and Santa Clara Street is the site of four key office buildings, one at each of the four corners, including the Bank of Italy.

All four office buildings in recent years gained new owners. In at least three instances, major renovations of the office buildings are underway or have been completed. In all four cases, it’s entirely possible that tech tenants could land at the projects.

“There will be 2,000 new employees here” at First and Santa Clara, Arrillaga said. “Zoom is going to continue to grow in this area. People are going to want to come down here to downtown San Jose.”

Full Article by George Avalos: https://www.mercurynews.com/2021/07/29/downtown-san-jose-poised-boom-challenges-loom-develop-tech-home-office/