Business and city leaders are touting the recent opening of a 23-story apartment building as a major win in the effort to bring more people into downtown San Jose.
Representatives of Boston-based developer Morro, San Jose Downtown Association leaders and Mayor Matt Mahan earlier this month celebrated the opening of The Fay at 10 E. Reed St. — a 336-apartment high-rise complex marketed as luxury apartments. City officials approved almost $10 million in tax cuts for the project, which Mahan said incentivizes developers to invest in downtown San Jose.
“Get the investment, get the housing, the residents, all that vibrancy and then in the long run, know that by growing the pie and having more economic activity, we’ll have the revenue to fund services,” Mahan said outside The Fay on Dec. 5. “I will thank my colleagues on the council for not just extending, but deepening the downtown high-rise fee waiver program.”
Russell Hancock, president and CEO of economic research group Joint Venture Silicon Valley, said the city’s fee waiver programs are a good strategy to attract more development downtown.
“People often refer to San Francisco as the crown jewel of the Bay Area, with its sweeping views and stunning properties. I think San Jose has felt like they’re in the shadow of that — well now something’s happened,” Hancock told San José Spotlight. “People have discovered San Jose, and these are serious people, investors, developers and cutting-edge architects.”
He said many developers view San Jose’s potential as a blank canvas that has yet to be fully realized.
Mahan toured The Fay about half a dozen times and told developers his vision for revitalizing downtown, Morro Vice President of Construction Curtis Wood said. In November, Mahan and Councilmembers Dev Davis and Pam Foley proposed an “Innovative Project Pathway Program” aimed at creating a streamlined approach to development in the downtown core.
Wood said they weren’t local developers in the traditional sense, but became such after working for years with city officials and gaining support from downtown advocates.
“We basically turned this corner that had otherwise been underutilized to something that has a bright, vibrant lobby. It’s a welcoming building and hopefully makes the area a little bit more comfortable and safer to walk,” he told San José Spotlight. “Ultimately, we’re going to try to get somebody into our retail space on the corner of First and Reed streets. Our goal is to really activate that corner, activate the neighborhood.”
Studio apartments at The Fay start at $2,750, with one-bedroom one-bath apartments between $2,880 to $3,530 for a larger one-bedroom, and $4,330 and up for two-bedroom two-bath apartments. The apartments range from about 400 square feet to a little more than 900 square feet.
“The apartments are European designed, with Italian cabinets and we have custom furnished apartments for a quarter of the building,” Wood said.
The property previously shared space with the historic Pallesen Apartments building, originally slated to be demolished in 2021 to make room for The Fay.
Downtown residents and the Preservation Action Council of San Jose successfully rallied to save the building and it was moved down to the corner of Fourth and Reed streets for an affordable housing project yet to be completed.
Preservation Action Council President Ben Leech said he’s glad to hear the project is a success and will be housing new residents, though he’s looking forward to the opening of affordable housing at the Pallesen Apartments.
“We’re not opposed to high-rise apartments, or even luxury housing, but not every site downtown should be seen as a development site, that’s the frame of mind we’re up against,” he told San José Spotlight. “Downtown needs a mix of buildings. If we treat every 2-story historic building as obsolete because it can’t be a 20-story building, we’re missing those smaller properties that also contribute.”
Downtown Association CEO Alex Stettinski said more residents are needed in downtown, along with more market-rate housing communities — and high-rise apartments are a great use of space to create more housing.
“Every additional (home) in downtown adds more vibrancy and foot traffic to the respective neighborhoods, which is really, really good,” he told San José Spotlight. “We currently have a huge amount of visitors coming in for nightlife … but during the day, during the week, it’s still fairly slow because office workers aren’t all back yet and there’s still a lot of office vacancies. So the residential component that’s added will make a big difference for not only our small businesses, but also for new businesses.”
Contact Vicente Vera at [email protected] or follow @VicenteJVera on X, formerly known as Twitter.
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