Downtown San Jose loses another major retailer

The closing of a neighborhood drugstore means the loss of much needed services for residents and business owners in downtown San Jose.

The CVS on The Alameda, which closed about two weeks ago, offered a convenient one-stop shop for groceries, basic goods and pharmaceutical needs, but it also became a “magnet” for homeless residents who are being housed at the nearby Arena Hotel, locals said.

Nanci Klein, director of the San Jose Office of Economic Development and Cultural Affairs, said the closure is part of a CVS company-wide initiative to shutter underperforming stores. Klein said this store was chosen as it was nearing the end of its lease.

“Of course, the closure of a general retail store such as a CVS is a loss to a neighborhood,” she said, “and we hope a similarly useful new tenant will soon take over that space.”

Over the years, downtown San Jose has watched all its major retailers depart, including two grocery stores, family-owned Zanotto’s and Safeway, plus the Ross store.

Scott Howell, 47, owner of Red Dot Fitness directly across from the CVS, sees The Alameda as an “up and coming area” with Google coming in. Howell said he saw the area’s potential pre-pandemic, when the Alameda was visually and culturally changing. Tech workers had moved into the area for work, but relocated during the pandemic, he said.

“Those were our clients,” Howell told San José Spotlight. “We’re feeling that. I need people moving into this area and seeing it as a viable place to live.”

Although Howell used the CVS to fill prescriptions, he said police were called there regularly, partly because of homeless residents who live at the neighboring Arena Hotel. The Arena Hotel is part of a $113 million collaborative initiative to convert four hotels into housing to help solve the homelessness crisis in San Jose.

Lane Marchetti, a 31-year old who works for Stanford athletics, and Kaytlyn Garland, a 29-year-old substance use disorder counselor, live nearby. They found CVS “quick and easy” for picking up groceries and cold medication. With its closure, and Google’s Downtown West development on the horizon, Marchetti fears further gentrification of the neighborhood. 

“It was super helpful. It’s the only thing of this variety that’s on this road,” he told San José Spotlight.

Marchetti said it looked like the store was struggling and often closed earlier than posted hours. Customers may have been deterred from shopping there due to all the homeless people hanging around, he added.

“We’ve got Whole Foods down the street and Core (Power) Yoga and other shops that are higher end,” he said. “We’re hoping it doesn’t turn into something that’s not affordable for everybody. With Google coming… it’s tough.”

Charles Erickson, 63, who works at Ace Hardware, sees the closure as a big loss for the community. He’d like to see another drugstore or supermarket take its place.

“It’s the only store right in the neighborhood that pretty much has everything you need,” he said. “Whole Foods is very pricey and not all of us can afford that. It’s very expensive to live in the South Bay.”

Colleen Mahoney, owner of Cultivate Kitchen and Whirlygig, is hopeful once the Arena Hotel “is sorted out,” vibrancy will return to the area. Mahoney said the Alameda Business Association has pushed for additional security, social workers and programs onsite.

Mahoney said she cleans up garbage and power washes the sidewalk daily in front of her businesses and would like to see more support from the city.

“My focus is on having stores that are open and safe and welcoming,” she told San José Spotlight. “Sure, the price difference between Whole Foods and CVS is drastic, but I appreciate the fact that when you walk by Whole Foods, you feel safe.”

Contact Lorraine Gabbert at [email protected].