San Jose comedy club site downtown bought by realty entrepreneurs

SAN JOSE — The historic Jose Theatre in downtown San Jose, home to a local comedy club and improv, is slated to be bought by two local realty entrepreneurs, a sign of more interest in the city’s urban core.

Don Imwalle and Gary Dillabough, two real estate developers and investors who are active in downtown San Jose, have agreed to pay about $2.1 million for the Jose Theatre, according to city documents and sources with direct knowledge of the proposed transaction.

All told, three groups bid for the building at 62 S. 2nd St. in San Jose, which was constructed in 1904 and is San Jose’s oldest theater.

The group with the winning bid, Monterey & Third Associates, offered $2.14 million; the second-place bidder, Structural Supply and Hardware, offered $1.65 million; and the third, Franklin Bell Services, offered $1.54 million.

Monterey & Third Associates is affiliated with Imwalle Properties, according to a redevelopment Successor Agency staff memo.

The price that will be paid for the 450-seat theater property is well within the range of property values in downtown San Jose, government officials said.

“The top bid is definitely fair market value” compared with other property deals in downtown San Jose, said Richard Keit, managing director with the redevelopment Successor Agency.

Imwalle said on Monday that he and Dillabough, who also are partners in the efforts to redevelop the old Camera 12 site a short distance from the Jose Theatre, are bullish about the prospects for this type of business the city’s urban core.

“We are long on entertainment in downtown San Jose,” Imwalle said.

Efforts by huge players downtown have spurred interest in the city’s urban heart. Google is planning a transit-oriented community of office buildings, homes, restaurants, shops and parks near the Diridon train station and SAP Center. Adobe will dramatically expand its three-building headquarters campus in downtown San Jose by building an adjacent fourth office tower.

“People feel optimistic that major improvements and more activity are coming to downtown San Jose, which is why you see deals like the Jose Theatre,” said Geri Wong, senior managing director with Newmark Knight Frank, a commercial realty firm.

The Jose Theatre was built by David Jack, a Monterey property owner whose name and hometown became the basis of the Monterey Jack cheese brand, according to the sanjose.com/underbelly/ website. The theater has changed hands at least seven times.

Over the decades, the theater hosted vaudeville acts, and legendary magician Harry Houdini once performed there. It’s shown silent films and second-run films. In 1989, the owners at the time, realty entrepreneurs Barry Swenson and Jim Fox, were forced to close the theater after it was damaged in the deadly Loma Prieta earthquake.

The first floor of the two-story Jose Theatre contains the performance stage and seating, and the second level accommodates a viewing balcony, offices, and a food and beverage area.

The deal also ensures that, at least for the near term, building tenant San Jose Improv Comedy Club will be able to continue to operate at the site, according to a city memo.

“They will honor the two years and two months remaining on the Comedy Club’s (Improv) lease,” according to a memo prepared by the redevelopment Successor Agency.

Imwalle said he and his partners also like the business model for San Jose Improv Comedy Club.

“There are some big players behind The Improv vertically integrating their sector of the entertainment world and bringing quality comics through,” Imwalle said.

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