Opportunity Zone Fund investor-developer Urban Catalyst closed this month on the last piece of the two-acre assemblage of land kitty corner from San Jose City Hall starting from the existing Chevron gas station up to St. John Street.
This may have been the smallest piece of land ever that controlled such an important large site in Silicon Valley. It’s a 10,000-square foot parking lot of 26 spaces serving retirement community Town Park Tower that now ties together the site for a one million square foot future development, the Icon/Echo Towers. An unbelievably complex transaction, it got a lot of detailed press when it closed.
Ritchie Commercial Downtown pioneer broker and activist Maggie Bludau and I started persuading the four legacy property owners on the block of their combined super-values around 2004 as the new city hall was rising. They mostly thought we were nuts. It took a full opera cast of characters and perseverance over the 19 years since then, far too much to tell for one column. Now through the miracle of opportunity zone money in an otherwise terrible market, it is complete.
As the sole broker involved and marveling at the beauty and success of the neighboring Miro Towers and its new restaurant — Rollati — reminds me of our small downtown and the changes over the years.
I recall that in 1989 there was tragic double police killing at the same intersection and most folks would not even walk past 2nd or 3rd Street. Once the Icon/Echo Towers are built, it is a full commercial district in its own right.
A bit of historical context: I came to San Jose to help my father in 1987 with his brokerage firm Ritchie & Ritchie, which was founded in San Francisco in 1956. Like many native San Francisco kids, I had been to San Jose just a very few times in my life. It is amazing how much the two major cities differ. I still happily live and work in both.
I was just exiting a fairly exciting early career in my 20’s working for two major developers (versus being a broker) in the heart of San Francisco. I was at Lincoln Property Company for most of those years while we built and marketed four major Financial District office buildings. We forget what a crazy boom era the 80s was for office development. My first day at Lincoln I was commanded to walk out and survey the competition, and dutifully obeyed with my trusty yellow pad in hand. There were 34 office buildings under construction in the core Financial District. The end result of that wild over building is well documented and part of the reason I drifted in to help my eccentric and charismatic father and take a break from San Francisco.
My father had opened a San Jose office in 1963 and was a true downtown believer in all his office locations, up to eight along the West Coast at his peak. He followed the freeway expansions — Redwood City in 1959 — then San Jose when it became the easy hour drive thanks to Eisenhower. Seems like we stopped infrastructure progress after that, or at least until we finish the BART extension. He was still downtown with a small office at 99 North First at St. John when I got here. The still existing small edifice got a development award in 1973 from the chamber of commerce, showing how desperate downtown was in those days.
I inherited three agents, two in their 70’s, dial phones and a receptionist two hours a day. I asked where the other commercial brokers were, and was told they left downtown years ago when it collapsed and moved to the modern airport office parks. This was when downtown was completely torn up for the light rail and other giant early pioneer public and private developments. I was intrigued — my urban mind started to spin and I went out knocking on doors.
I met uber-visionary literati Mayor Tom McEnery and his own personal Haussmann, San Jose Redevelopment Agency (RDA) boss Frank Taylor, both of whom I consider brilliant strategists for a very grand and risky plan. Think Fairmont (Signia today), Shark Tank, Convention Center, MLK Library, Tech Museum, San Jose Museum of Art expansion, city hall — the list is hard to fathom these days. I did a ton of business associated with the RDA over many years (including two building purchases) until the very short-sighted extermination of all California RDAs under Gov. Jerry Brown in 2012 — still the greatest unsolved public mystery as to exactly why. We may be clamoring for the return of RDAs with the office building extinction event we are facing now.
Coming from hyper competitive downtown San Francisco where every inch of land was under constant pursuit, I felt like I was bathing under empty parking lots in downtown San Jose that all seemed like key development sites to me. I pried several as I quipped, “out of bondage,” meaning getting them sold from long term dormant ownership and into well capitalized investors and developers, all of which have changed hands along the way since.
I consider 225 West Santa Clara Street a West Side bookend to what will be the East Side bookend Icon/Echo Towers. All those sites were mostly empty parking lots previously. I know we like parking in San Jose, but just step back and look at the transformative effect of those buildings on the environment.
We will rise again from our incredibly painful post-COVID workplace revolution and office building collapse. My hope is to see equally or more dynamic developments on the remaining parking lots.
San José Spotlight columnist Mark Ritchie is the owner of commercial real estate brokerage firm Ritchie Commercial, and has spent his entire career in commercial real estate. His columns appear every second Wednesday of the month. Contact Mark at [email protected].