Staedler: Retail downtown needs a strong foundation to build upon

One of the greatest challenges to face downtown San Jose is the lack of a stable retail base.

The former and now dissolved San Jose Redevelopment Agency worked tirelessly on creating retail in downtown San Jose and beyond. We spent an ungodly amount of money to create retail before it was ready to take hold. Whether it was the Pavilion shopping center, Safeway under Tower 88, Camera Cinemas, they all closed to great surprise and consternation to many downtown residents. (Note: This isn’t a criticism of my former employer, just a disappointing reality of the time and it makes my head hurt trying to count the money spent over the years.)

A question that I get asked often is: what will it take for downtown retail to turn the corner? I don’t believe that it’s a lack of branding for downtown San Jose. In my humble opinion, it’s quite simply a lack of a stable daytime/nighttime population in downtown. For that too change, I believe that it will take one development cycle of a significant amount of office development followed by a cycle of a significant amount of residential development.

After both of those events occur, it will change the vibrancy, activity and the mindset of retailers where they can make it last in downtown.

Another asset that does not get enough attention is San Jose State University. Per the Feb. 2019 Downtown San Jose Retail Strategy report prepared by Strategic Economics and Greensfelder Real Estate Strategy:

  • Approximately 4,000, or 15 percent, of SJSU undergraduate students lived on campus in the fall of 2017.
  • Another 15,000 students live within three miles of the campus.
  • Within the next 3-5 years, the campus will add between 1,500 and 2,500 new on-campus beds

This doesn’t take into account the potential development planned for the current Alquist building site. The SJSU students could be an attractive draw for retailers and restaurants looking to move downtown. There needs to be a cohesive strategy for integrating SJSU into the planning mindset of San Jose. When you look at the old planning maps for downtown, SJSU is a grayed-out swath of downtown.

The Google Diridon project will take a lot of attention and steam out of what is seen as the current downtown core. This could cause that traditional area to be stagnant until the two become linked. The Jay Paul, Sobrato, Dillabough/WeWork projects will create great momentum but will not change the tide of downtown instantly.

It will take the completion of BART to downtown San Jose and thousands of residential units built in downtown to turn the corner after the first wave of office development is occupied. In the meantime, we need to keep bringing events downtown and increase the Property Based Improvement District fees so we can increase the scope and amount of work done by the amazing GroundWerx cleaning crew. The homeless crisis facing downtown does not help the situation and until we can find a way to house them, we need GroundWerx more than ever.

The last thing I want to leave you with is this: please don’t accept the throw away explanation that retail is just cyclical and it will come back. It’s never been that simple and with the change in shopping behavior, it’s harder to navigate than ever. I believe the downtown we all hope for and dream of will come, but we need a solid foundation for it to flourish.

San José Spotlight columnist Bob Staedler is a principal at Silicon Valley Synergy, a San Jose-based land use and development consulting firm. His columns appear every first Monday of the month. Contact Bob at bob@svsynergy.com or follow @BobStaedler on Twitter.

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