An ‘Idea Tree’ Grows in San Jose

San Jose Convention Center The Registry real estate

By Sharon Simonson

SAN JOSE—The long-awaited expansion and renovation of the tired San Jose McEnery Convention Center is unveiled Oct. 10, adding modernity, 125,000 square feet and a thrust of economic momentum to the city’s downtown.

The opening signals a new moment in San Jose history and is something the community, led by hoteliers, has sought since before the financial crisis. Along with the transformation of the Mineta San Jose International Airport less than 10 minutes away, the $130 million investment creates new leverage for a long-time city mission to increase downtown economic vitality.

The immediate goals are to draw more conventioneers to goose the city’s tax take and the revenue available to support the arts. Hopes are higher for the longer term as downtown proponents push to enhance its soul factor and attractiveness to workplace talent—a key to business development and expansion today.

“We see a strong link between economic development and arts development,” said Kerry Adams Hapner, the city’s director of cultural affairs and deputy director of economic development. “Among cities that are competing for talent, the ones that are most competitive are the ones with a breadth of entertainment and cultural offerings. More people are living first and working second, and companies are following the talent.”

The expansion brings the convention center to 550,000 square feet including a new 35,000-square-foot Grand Ballroom featuring 22-foot glass walls that allow visitors to view the city’s downtown and a large outdoor plaza.

“It is the biggest, most sophisticated [ballroom] in the valley,” said Michael Mulcahy, board chairman of Team San Jose, the convention center manager and overseer of multiple city venues including the California Theatre and the Center for the Performing Arts. “We can now serve 2,700 meals an hour. We have greater flexibility and scale. We can do multiple events at the same time, which the old building didn’t allow us.”

Mulcahy, who addressed the Silicon Valley chapter of Commercial Real Estate Women on Sept. 10, is managing partner of San Jose-based SDS NexGen Partners LP. SDS is an investment partner in downtown’s Hyatt Place and Hilton Hotel; the Hilton is connected to the convention center. The Hyatt is across the street.

SDS also owns 12 buildings on Lincoln Avenue in Willow Glen, one of downtown San Jose’s oldest and closest suburbs. Mulcahy is a former San Jose mayoral candidate.

“If you live south of Palo Alto and west of Fremont—including Fremont—and north of Morgan Hill, the health and vitality of the city of San Jose is critical to your future and your kids’ futures,” Mulcahy told CREW Silicon Valley. “I believe the airport and convention center investments will help drive the San Jose economy.”

Team San Jose anticipates an annual increase of $15 million for a total of $104 million in visitor spending this year from the increase in convention traffic from the expansion, said Meghan Horrigan, communications manager for Team San Jose. Hotel-room nights have climbed from 238,000 in the last fiscal year to more than 250,000 this year, above projections. The calculus includes only those visitors and hotel stays that the organization brings to San Jose to use the Convention Center and the four additional venues it manages. Visitors are counted once even if they use multiple Team San Jose facilities.

The number of convention visitors to the city who use at least one of the venues is expected to reach 1.2 million or more this year, up by about 100,000 from last year, Horrigan said.

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Photo by Neil Schumaker

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