Downtown San Jose deal poised to spur big new residential tower

SAN JOSE — A new residential tower is poised to rise in an emerging downtown San Jose neighborhood, now that a veteran developer has grabbed a choice site near bustling San Pedro Square.

Swenson, a development firm, acting through an affiliate, San Pedro Life I, has bought a vacant lot that fronts on West Julian, North San Pedro and Devine streets in San Jose, according to Santa Clara County property records. The seller in the Sept. 19 deal was the San Jose Redevelopment Agency, a now-defunct city entity.

“Any development in that space must be high-rise residential,” said Christy Marbry, senior development director with Swenson, one of the Bay Area’s stalwart development companies.

That residential tower requirement, Marbry said, stems from a formal development agreement between Swenson and the government entity that is the successor to the San Jose Redevelopment Agency.

The affiliate of San Jose-based Swenson paid $4.7 million for the property, located in what the city envisions as a key component of the emerging downtown.

“Its part of a whole new residential neighborhood that is being created north of San Pedro Square,” said Scott Knies, executive director of the San Jose Downtown Association. “The area is seeing construction of new homes, it has a new street grid, parks are being created.”

The North San Pedro neighborhood is a few-minutes walk from a future BART station downtown and roughly a 20-minute walk from Diridon Station, which is slated to host a future BART connection, along with the train hub’s current light rail, Caltrain, ACE Train, Amtrak and Capitol Corridor lines.

“It’s a great location,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land use and planning consulting firm. “It’s going to be right in the middle of this brand-new neighborhood that is very walk-able and will be very desirable.”

Yet it’s also possible that the Swenson firm will own the property primarily for the purposes of steering the site through the city approval and planning process. Once that’s accomplished, Swenson may seek a buyer who will accomplish the property’s ultimate development.

Potentially, hundreds of residential units could be built on the 1.2-acre site.

“The original plan called for a 250-unit tower on that site,” said Staedler, a former redevelopment agency official.

No firm proposals have emerged from Swenson with a precise number of dwelling units, nor is it clear whether Swenson is considering condos or apartments or other types of housing for the newly purchased property.

Demand for housing in downtown San Jose could intensify amid expansion plans by tech giants and other companies in the city’s urban heart. San Jose-based Adobe Systems is eyeing a major expansion of its existing headquarters campus with a fourth office tower that would be built on an adjacent site. That 18-story high-rise could accommodate 3,000 Adobe employees, dramatically expanding the tech company’s workforce that, as of last February, totaled roughly 3,500 in downtown San Jose.

Mountain View-based Google has begun to fashion plans for a transit-oriented community of office buildings, homes, stores, restaurants, open spaces, amenities and a cultural loop near Diridon Station where 15,000 to 20,000 of the search giant’s employees would eventually work.

The prospect of development on the Swenson site comes amid an ongoing push by San Jose Mayor Sam Liccardo to help combat the housing shortage in the Bay Area by encouraging more housing in the region’s largest city, including residences clustered near transit hubs.

“The Swenson site is the type of development that San Jose wants, and it is part of the mayor’s plan for more housing in San Jose and downtown,” Staedler said. “There will be a lot of interest in this site if Swenson decides to sell it.”

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