New Office/Retail Addition Proposed for East San Jose’s ‘Eclectic’ La Placita Tropicana

San Jose, Office, Retail, La Placita, Bay Area, Tropicana shopping center, Target, Mi Pueblo Food Center, Colliers International

By David Goll

An environmental study has given a proposed East San Jose office and retail building a green light to move forward.

The draft of an initial environmental study found no adverse impacts would result from construction of a three-story, 31,744-square-foot building at La Placita Tropicana shopping center, located at the southwestern corner of Story and King roads in San Jose, just east of Highway 101.

Next stop for the project is obtaining a site development permit, a request that must be reviewed by Steve McHarris, the city’s top planning official, according to Rebecca Bustos, project manager in the city of San Jose’s department of planning, building and code enforcement. She added, however, city staff is awaiting revisions in the project suggested by planners last spring to its developer, Dennis B.K. Fong. Fong, along with business partners, began buying portions of the retail center 32 years ago.

Fong did not return phone messages seeking comment on the proposed project.

Bustos said city officials will not require any additional studies of the structure, which would be built on a site between two existing buildings facing South King Road. The project calls for the building to contain 20,748 square feet of office space and 10,996 square feet of retail. She said general office and retail tenants would be permitted in the new building.

La Placita Tropicana, known as the Tropicana shopping center when it first opened its doors in 1960, has long been a popular destination for Hispanic and now Asian shoppers who live in surrounding neighborhoods. It contains a mix of retail stores, restaurants and other commercial businesses in 10 separate buildings.

Though there are major national and regional retail chains just across the street, including a Target store at 1750 Story Road and Mi Pueblo Food Center at 1745 Story Road, the La Placita Tropicana center is primarily mom-and-pop retail stores and food-related businesses, according to Tom Nelson, vice president in the San Jose office of Colliers International.

“It’s an eclectic mix of nationals, but mostly newer mom-and-pop businesses, and some older ones, too,” Nelson said. “It’s a mixture of stores and restaurants appealing to Latino and Asian consumers.”

Nelson said he could see new office space meeting a growing demand on San Jose’s diverse east side.

“There is more and more demand in east San Jose, but not much supply,” he said. “There is some office use mixed in with the existing tenants at [La Placita Tropicana], but there is a strong demand for medical offices, attorneys and professional services. This new building is sort of a pioneering effort, to some extent.”

Nelson said occupancy rates are high and asking lease rates, though varied by location and type of business in the center, average about $3 per square foot on a monthly basis.

Renewal and renovation projects have a long, colorful history at La Placita Tropicana. Fong has worked to update the center, repave the parking lot and freshen up building exteriors since buying it in 1983. But he had a lengthy legal battle with San Jose’s now-disbanded Redevelopment Agency, which filed condemnation proceedings in 2001 when city officials contended Fong wasn’t moving fast enough to revitalize Tropicana. But he challenged the attempt and ended up winning a $6.5 million settlement against the city in Santa Clara County Superior Court in 2005.

West Coast Commercial Real Estate News