Village eyed for part of El Paseo de Saratoga mall in San Jose

SAN JOSE — Big changes would sprout at a well-known San Jose shopping center, El Paseo de Saratoga, under plans on file with the city that envision the development of a village of offices, homes, and retail.

Peter Pau, a busy developer whose wide-ranging real estate efforts include replacement of the decrepit Vallco mall in Cupertino with a mixed-use village, has filed a preliminary proposal with municipal planners for a major revamp of a portion of El Paseo de Saratoga in San Jose.

Two somewhat different development approaches for the 343,000-square-foot El Paseo de Saratoga and a small property across the street at 1777 Saratoga Ave. are being floated to city planners by Sand Hill Property, which is headed by Pau. Despite its moniker, El Paseo de Saratoga is located in southwest San Jose near the corner of Saratoga Avenue and West Campbell Avenue.

Under one scenario, 720 units of housing and 25,000 square feet of retail would be developed at the El Paseo de Saratoga, while, on the smaller lot across the street 120,000 square feet of offices and 130 residential units would sprout. About 108,000 square feet of the mall would be bulldozed, under this option.

A second option would produce 400,000 square feet of offices on the shopping center site, along with 580 housing units and 10,000 square feet of retail, the planning documents show. The scenario for the smaller parcel would remain the same as the first option. About 97,000 square feet of the mall would be bulldozed with this version.

In some instances, the plans show, the building heights would reach 10 stories and 12 stories. One version suggested some of the taller buildings could contain both residences and offices.

“The implementation of this is the hard part,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land use and planning consultancy. “Let’s see if it can be realized.”

AMC Saratoga 14 theaters and REI, a sporting goods and outdoor gear giant, are among the major anchors of the center. Smaller merchants include Ulta Beauty, Peet’s Coffee, Jamba Juice, and Red Robin restaurant.

In both scenarios, the movie theaters, REI, Ulta Beauty, and other merchants would remain after the mixed-use village components are completed, the planning documents show.

“This area is somewhat over-retailed already,” said Michael Messinger, a partner and principal executive with Meacham/ Oppenheimer, a commercial real estate firm that specializes in retail and restaurants. “The loss of some of the retail space shouldn’t hurt residents too much.”

A structure that once contained a now-closed Lucky supermarket would be bulldozed under the development scenarios that Sand Hill Property has suggested.

Trader Joe’s, Sprouts Farmer’s Market, and Safeway are among the grocery options still located in the area.

In January, Sand Hill Property paid $146.6 million for El Paseo de Saratoga.

“The center is doing OK over but like other centers, some of the big merchants face challenges from online shopping,” Messinger said.

In Messinger’s view, the movie theaters are doing a robust business.

“The AMC theaters are doing great, they are a very strong anchor,” Messinger said. “The closest theaters are at Santana Row and The Pruneyard.”

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