SAN JOSE — A new housing development could sprout in an up-and-coming arts and entertainment district in the southern section of downtown San Jose.
A big hurdle was cleared on Feb. 1, when an affiliate controlled by two San Jose-based developers bought the development site at the southeast corner of South Market and Balbach streets, a short distance from the city’s convention center. Acting through the affiliate, developers John Pringle and Dennis Randall, principal executives of Acquity Realty, paid $6.5 million for the property, according to Santa Clara County public records.
“There is a lot of demand for residential and we really like this location,” Pringle said.
The site is in the South First Area, a downtown San Jose arts, entertainment, restaurant and nightlife district that’s nicknamed SoFA.
The developers have proposed construction of 130 residential units and ground-floor retail, and potentially a restaurant.
“Being in SoFA totally works with this project,” Pringle said. “The theaters, the nightlife really play into this. There is a lot of interest in a restaurant on the ground floor.”
At present, the project site at 477 S. Market St. is occupied byTate Family Complete Auto Care, whose offerings include Firestone tires.
“The name we picked for the project is The Firestone,” Pringle said.
Acquity is planning amenities that would go beyond retail offerings. Pringle said The Firestone, planned as five stories, will have rooftop gardens and a barbecue.
The developers are actively seeking construction financing for the project, hope to break ground before mid-year and say the first residences could become available by the end of 2020. To help control building costs, the project will feature wood frames.
“The cost of construction is rising faster than rents,” Pringle said. He estimated that construction costs have been rising by about 8 percent to 12 percent annually in recent years. An unprecedented building boom in Silicon Valley has intensified demand for construction materials and labor.
“The SoFA district is really blossoming,” said Mark Ritchie, president of Ritchie Commercial, a real estate firm.
Among the new residential projects in the area: The Pierce, with 230 units, opened recently; and Sparq, with 105 units, is under construction.
“It’s amazing to see how SoFA is changing with the new residential in the area,” Ritchie said.
Downtown San Jose in particular has seen a jump in development proposals, new construction and property purchases, especially since BART is expected to connect to the Diridon train station. The widening interest in downtown San Jose soared after it was revealed that Google was interested in a transit-oriented community of office buildings, homes, restaurants and shops near Diridon Station where 25,000 people could work, including 15,000 to 20,000 employed by the search giant.
Plus, Adobe intends to build a new office tower for 4,000 of its employees next to its existing three-building downtown San Jose headquarters campus.
“Google isn’t here yet, but millennial urban renters like what’s going on in downtown San Jose,” Pringle said. “You constantly can feel a new vibe and energy downtown.”