Bo Town downtown San Jose site eyed by busy developers

SAN JOSE — The old Bo Town restaurant site in an up-and-coming section of downtown San Jose is being actively considered for a tower project, according to a development group that has struck a deal to buy the choice property.

A venture led by two San Jose-based real estate and investment companies — Urban Community, headed by developer Gary Dillabough, and Urban Catalyst, headed by developer Erik Hayden — has obtained a contract to purchase the Bo Town property at 409 S. Second St. near East San Salvador Street. Case Swenson, president of development and construction firm Swenson, and Richard Berg, who owns numerous properties in downtown San Jose, are also involved in the venture.

“This is in a very important part of downtown San Jose that we really want to improve,” Dillabough said. “It’s very much like the effort to upgrade the corner of First and Santa Clara” a few blocks away.

The project represents the second time this month that a major joint venture redevelopment effort in downtown San Jose has been unveiled by the Urban Community and Urban Catalyst firms, which suddenly are becoming key players in the city’s urban core.

In early April, Urban Catalyst and Urban Community said they were working together on a major facelift that would preserve key historic elements of a property at 36 S. First St. and add offices, retail, a restaurant and a new fountain that would also replace the old Lido Nightclub.

Urban Catalyst was formed to create an opportunity fund that would provide development expertise and cash for selected properties in Bay Area districts that have been designated as opportunity zones. Large sections of downtown San Jose, as well as parts of Oakland and San Francisco, are in opportunity zones.

The Bo Town site is next to the crucial Valley Title property on a block bounded by San Salvador, Second, San Carlos and First streets where a Dillabough-headed group wants to replace an outmoded office building and surface parking lot with a million-square foot complex of offices, retail and residences.

The eventual scope of the Bo Town project could widen. That’s because a partner in the venture, Richard Berg, owns through affiliates at least two parcels directly adjacent to Bo Town, with addresses at 400 S. First St. and 420 S. First St., Santa Clara County Assessor’s Office records show.

Both the Bo Town site and next-door Valley Title property could well qualify for favorable tax benefits and financial advantages made possible by being in an opportunity zone. Plus, both are in what’s called the South First Area, or SoFA, arts, entertainment, restaurant and nightclub district.

“Bo Town is 100 percent in the opportunity zone,” Hayden said. “Bo Town is a great location, even if it wasn’t in an opportunity zone.”

What would be built at the Bo Town site, especially considering its proximity to the huge Valley Title development location? A residential tower or an office tower would appear to be likely candidates.

Plus, a future project would be poised to take advantage of newly relaxed curbs on the heights of buildings in downtown San Jose, said Joshua Burroughs, chief operating officer and development chief with Urban Catalyst.

“You could go about 300 feet high, maybe add one or two stories more than what has been allowed,” Burroughs said.

The property is the location where Bo Town, a Chinese and Vietnamese restaurant, had operated for about 30 years until it closed this year.

When Bo Town shut its doors in March, the closure was accompanied by a sign that said it would be out of business “for good” at the South Second Street site. Since the Dillabough and Hayden venture doesn’t own the site yet, it was neither the landlord nor owner of the property at the time Bo Town departed.

“We’d be happy to talk to Bo Town” to explore whether it might be possible to incorporate the restaurant into the new project at the site, Hayden said.

Urban Catalyst might hunger for more real estate in San Jose’s urban core.

“We are looking at doing 10 to 15 projects in downtown San Jose,” Hayden said. “We want to do more than one-off projects. We want to create entire places downtown.”

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