Downtown may get hundreds of homes
Longtime gas station property in San Jose is slated to yield to tower
SAN JOSE >> A gas station at a prominent downtown San Jose corner has been bought by an increasingly busy development company that plans to construct a housing tower with hundreds of residential units.
Urban Catalyst has bought the site occupied by a Chevron station at Santa Clara and Fourth streets — one of the few fuel stations in downtown San Jose — and says it is planning a mixed-use residential and retail development on the key street corner.
“We are going to do highrise residential with quality retail on the ground floor,” said Erik Hayden, founder and managing partner of Urban Catalyst.
Urban Catalyst was formed to establish and guide an investment fund that can capitalize on the tax savings made possible by opportunity zones.
“We are looking to develop 250 residential units,” said Joshua Burroughs, Urban Catalyst’s chief operating officer.
Urban Catalyst, acting through an affiliate, UC Chevron, paid $15.9 million for the gas station site at 147 E. Santa Clara St., according to property records filed Friday with Santa Clara County. The transaction was arranged by Mark Ritchie, principal executive and broker with Ritchie Commercial, a real estate firm.
The buyer also obtained an $11 million loan from
Acore Capital to help finance the purchase. Acore has become an active lender in downtown San Jose and other parts of Silicon Valley within the past two years.
The gas station property is on one quadrant of an intersection that is poised to undergo a dramatic transformation and upgrade, propelled by widening interest from developers in the area.
“This is a key development site downtown,” Ritchie said. “This corner is becoming one of the important intersections in downtown San Jose.”
The others corners of Fourth and Santa Clara feature the under-construction Miro residential towers that aim to be iconic additions to the downtown skyline, San Jose City Hall and bustling 4th Street Pizza.
Adding to the activity at the intersection, Bayview Development, the developer and owner of the Miro project, has bought the 4th Street Pizza property and a parcel two doors away on East Santa Clara Street.
Urban Catalyst is the latest player to emerge as an active investor in downtown San Jose since Google announced plans for a transit-oriented village near the Diridon train station. Jay Paul Co. and Gary Dillabough also have become significant investors in the downtown area. Plus, legendary developer Sobrato Interests plans to build a striking office tower at Market and San Carlos streets.
The prospect of two new BART stations in downtown San Jose has also prodded developers. One BART stop will connect to the Diridon transit hub, and the other is slated to emerge at First and Santa Clara streets, a few blocks from the Chevron
station site.
“This is right in the heart of the downtown,” Hayden said of the Chevron site. “And with the BART stop planned for right down the street, this is going to be a true transit-oriented development.”
The parking for the new project will be above ground and is going to be configured in such a way that the parking structure could someday be converted to residential units, should people drive fewer cars as time passes, Burroughs said.
The new owners have provided the gas station with a lease so it will remain open for a considerable time, since it could be a couple of years before actual construction begins on the new housing tower.
“I’ve run this station for 18 years, and it’s been a Chevron station for about 50 years,” said Manraj Natt, its owner.
For Ritchie, the sale of the gas station property represents a successful culmination of his efforts to find a buyer, a quest that began roughly a decade ago.
“We had a buyer, and then the economy tanked, and another buyer went away,” Ritchie recalled. “It’s finally done.”
With the most recent purchase, Urban Catalyst, which describes itself as the first opportunity fund in Silicon Valley, has spent $30.6 million buying sites in the Bay Area, all of them in downtown San Jose. The company intends to eventually undertake 10 projects in San Jose’s urban center.
Urban Catalyst doesn’t intend to be idle for long with the shopping cart that it’s stuffed with a growing number of properties.
“Most of our construction will start in 18 to 24 months, if not all of it,” Hayden said.