By Nancy Amdur
Downtown San Jose’s skyline is transforming with many new developments in the works.[contextly_sidebar id=”trCZ2NZtKDiF8bILYIe9CiI0h3UvD2Wi”]“Change is in the air downtown,” said Scott Knies, executive director of the San Jose Downtown Association at the group’s recent annual meeting held in October. “You can see it in all directions.”
As downtown evolves from primarily a business district into a diverse urban neighborhood, new residential projects are an essential piece of the plan.
“The current housing mini-boom, with 2,500 units under way or entitled, will infuse downtown with thousands of people,” Knies said.
“Almost every month, there’s a new project to talk about. We’re trying to advocate for good urban design, good walkable communities,” said Steve Cox, chair of the association’s Downtown Design Committee, which includes local architects, designers and urbanists.
Among new downtown developments is Essex Property Trust’s 23-story apartment tower at One South Market, which was recently topped out and will offer 312 rental units when it opens in March. Also under way are the 234-unit Pierce building at South Market Street and Pierce Avenue in the SoFA (South First Area) district by Sares Regis Group of Northern California; and San Jose State University’s 119-unit student housing project on 5th Street by Los Angeles-based Symphony Development.
Further, Simeon Residential Properties of San Francisco is building the Centerra, a 347-unit high-end apartment project behind San Pedro Market, on a block bounded by Almaden and Notre Dame avenues and St. John and Carlyle streets, slated to open in 2016. Another eight projects comprising more than 2,000 units are under city review, according to a downtown association development map.
Knies added that the downtown association favors creating high-density housing in the district and is against a proposal to charge a citywide housing impact fee of $17 per foot on rental housing, including for high-rise buildings, to fund affordable housing. City Council could pass the housing fee as early as this month.
“We believe such a fee will stall out downtown housing production just as it is revving up,” Knies said. The association would like a lower fee for downtown and to exempt high-rises.
Other types of downtown projects also are on the way, including a new family courthouse at 201 N. First St., which is under construction, and AC Hotels’ soon will start building a 210-room hotel at Santa Clara Street and Highway 87, Knies said.
“How do we keep this development momentum going and increase the energy level downtown?” Knies asked. “The key ingredient for making successful places is people.”
Drawing visitors downtown is part of the association’s goals. The district’s newly expanded convention center along with the SAP Center, home of the San Jose Sharks hockey team, and theater at Broadway San Jose are helping to attract visitors.
“Visitors are a crucial element to downtown’s prosperity and we have to increase our efforts to attract them,” such as encouraging more events and festivals and renewing the Sharks’ lease, Knies said.
To more fluidly connect downtown districts and encourage pedestrian traffic, various “street life” projects are planned, including mural corners and urban gardens, said Kelly Cosgrove, a board member of the Property Based Improvement District, which comprises district property owners and is managed by the downtown association.
Also, temporary pop-up stores will open during the holiday season to encourage more retail traffic, said Cosgrove, who is the general manager of San Jose’s Fairmont Hotel.
As far as bringing more businesses to downtown San Jose, Knies noted that the district’s proximity to transportation options is a benefit. Commercial office vacancy in Downtown San Jose is dropping, hitting 17.3 percent in the third quarter 2014, down from 22 percent at the same time last year, according to a report by commercial real estate brokerage Cassidy Turley. The district’s average Class A office rent totaled $2.99 for the third quarter, up from $2.72 during the same period in 2013.
“So long as it continues to focus on smart planning and development strategies, Downtown San Jose appears to be poised for healthy growth while really transforming in a way that is distinguishing itself as an innovative central business district,” said Joshua Deale, a San Francisco-based Cassidy Turley spokesperson and former senior research analyst for the firm’s Silicon Valley offices.
“More than anything, the talk of momentum reminds us of downtown’s potential,” Knies said.