Years after the Camera 12 movie theater in downtown San Jose shut its doors, the project promised to replace it is now one step closer to construction.
Local development firm Urban Catalyst, which purchased the property in 2019, recently obtained a building permit for the 100,000-square-foot project. The firm also received a $56.2 million senior construction loan through investment group Rialto Capital.
The project, called Paseo after the nearby Paseo de San Antonio, is the first of six developments from Urban Catalyst to begin construction this year in downtown San Jose. The three-story former movie theater will be converted into a mixed-use office and retail space with bars and restaurants. Construction is expected to finish July 2022.
“It’s an exciting revamp of an iconic downtown structure—urban revitalization at its best,” said Erik Hayden, co-founder of Urban Catalyst, in a statement.
The development firm snatched up the building, which has been closed since 2016, as part of its push to redevelop downtown San Jose.
Paseo is one of six mixed-use commercial and retail projects by Urban Catalyst in its first funding round which closed in December after raising $131 million in investments. The projects are in one of the city’s so-called opportunity zones: Economically challenged areas where investors can receive federal tax breaks for putting money toward revitalization.
The opportunity zone program, established by the federal government in 2017 and carried out by individual states, is meant to encourage development in neglected areas, which could in turn create jobs and housing. Investors can receive significant tax breaks, and there are also incentives for businesses that relocate or expand in opportunity zones.
The state identified 11 opportunity zones across San Jose, including downtown and the Monterey Corridor industrial district. Urban Catalyst focuses exclusively on the downtown opportunity zone. More than 8,000 opportunity zones are designated by state governments across the country, including nearly 900 in California.
To qualify as an opportunity zone, a neighborhood must have a poverty rate of at least 20% or a median family income less than 80% of the regional or statewide median income.
“The site of the former Camera 12 on the Paseo de San Antonio is being transformed into a very exciting office and retail space and we are so pleased the project is progressing,” Blage Zelalich, the city’s downtown manager, told San José Spotlight. “The city was part of the groundbreaking for the project just before COVID hit, and we’re looking forward to the ribbon-cutting.”
Urban Catalyst is currently working on its second development fund, where investors can contribute to other downtown projects.
While the pandemic slowed construction in some areas, San Jose’s downtown opportunity zone is thriving and its development projects are on track, officials say.
Urban Catalyst has numerous projects in development downtown, including a revitalization of Fountain Alley, the Delmas Senior Living project and co-living projects such as Madera across from Google’s Downtown West.
Contact Lloyd Alaban at [email protected] or follow @lloydalaban on Twitter.
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