SAN JOSE — Urban Catalyst has formally launched a project to replace the long-shuttered Camera 12 movie complex with offices and dining spaces, saying the sweeping redevelopment is just the vanguard of more than $700 million in property ventures the firm plans in downtown San Jose.

An array of tech companies, as well as some top-flight restaurants, have serious interest in leasing offices in the choice downtown San Jose site at 201 S. Second St., according to sources with direct knowledge of the negotiations.

“We’re getting interest from some smaller tech companies, and at least one large tech company,” Erik Hayden, chief executive officer of project developer Urban Catalyst, said in an interview.

Paseo is the anticipated name of the project. Urban Catalyst intends to develop 15,000 square feet of retail on the ground floor, and 73,000 square feet of offices on the property, marking a complete makeover of the multi-level site.

“Projects like this are transformative,” said Joshua Burroughs, chief operating officer with Urban Catalyst. “We want to breathe new life into this building.”

Jeff Arrillaga, a vice chairman with commercial real estate firm Newmark Knight Frank, has begun to scout for office tenants. Nick Goddard, a senior vice president with Colliers International, a commercial real estate firm, is seeking retail tenants.

The exterior structure of the building will be retained. Inside, walls will be pushed back to create wide-open spaces, the theater pods will be gutted to create large spaces, and the long escalator tracks will be demolished, according to Hayden.

Goddard suggested that the high windows on the ground floor would draw the interest of restaurant operators.

“This area really needs to be revitalized,” City Councilmember Johnny Khamis said. “I really want to thank Urban Catalyst for your commitment, passion, and energy for downtown San Jose.” Khamis is chairman of the City Council’s Community and Economic Development Committee.

At the formal groundbreaking Thursday in the lobby of the one-time cinema multiplex, political, government, and business leaders wielded gold-tinted sledgehammers in a facsimile of a traditional construction launch.

“We are really breaking ground on an opportunity,” City Councilmember Sylvia Arenas said. “It will create opportunities for our residents, it will create jobs, create vibrancy.”

Scott Knies, executive director of the San Jose Downtown Association, recalled the fanfare when the building first hosted movies as the UA Pavilion, which opened in 1996 in an eight-screen format.

“This is one of those redevelopment-era buildings that desperately needs a refresh,” Knies said. “This is really going to activate and help revive this block.”

In December 2019, Urban Catalyst, acting through affiliate UC 201 S 2nd Street Owner, paid $24 million for the property. Urban Catalyst also obtained $13.6 million in financing from Bridge Bank.

Yet this project would only represent the start of what Urban Catalyst anticipates will be a widening level of investment in downtown San Jose.

“We are going to see a lot of Urban Catalyst groundbreaking events in the future,” Knies said.

San Jose-based Urban Catalyst was formed to capitalize on the tax benefits conferred on companies that undertake substantial development projects in specified geographic areas that are known as opportunity zones. Created through a 2017 tax reform plan initiated by President Donald Trump, the opportunity zones include nearly all of downtown San Jose.

In 2019, Urban Catalyst raised $60 million from investors, using the cash as equity to leverage additional financing for its projects, according to Hayden. In 2020, Urban Catalyst expects to raise at least that amount. Urban Catalyst owns seven project sites in downtown San Jose, including the Paseo Camera 12 property.

Hayden predicted on Thursday that Urban Catalyst will soon purchase its eighth property as the company’s local ventures widen.

All told, the Urban Catalyst projects in downtown San Jose have a combined value of $700 million, with the Paseo development at the Camera 12 site representing just the first endeavor, according to Hayden.

“We want to see activation here,” Hayden said. “We want to see coffee shops, dining, people buying flowers. We want to make improvements, block by block.”