San Jose sites bought by Dillabough-led group

SAN JOSE >> An increasingly active developer and investor has bought several parcels in downtown San Jose that include the City Lights Theater and several nearby properties.

An affiliate of Urban Community, a company led by development executives Gary Dillabough and Jeff Arrillaga, has bought several parcels near the corner of East William Street and South Second Street, according to Santa Clara County property documents that were filed in mid-March.

The addresses for the parcels that Urban Community Fund purchased are at 501, 503, 505, 529, 531, and 545 S. Second St., and 540 S. First St., county public documents show.

“We are not sure what we are going to develop there,” said Dillabough, a principal executive with Urban Community. “It could be an office or residential development.”

Concepts had previously been submitted by the sellers for residential towers on the property, but that entitlement process was halted.

Urban Community paid $22.5 million for the properties, according to the public property records.

PiMac Mortgage Fund and Lone Oak Fund provided financing for the purchase.

The parcels are located in an up-and-coming and hip neighborhood known as the South First Area, or SoFA district of downtown San Jose.

“We think this development can be an important component in the creation of a better community in the SoFA district,” Dillabough said.

The SoFA district of downtown San Jose is dotted by restaurants, nightclubs, beverage lounges, entertainment spots, and hotels.

“We’ve been saying all along that we are trying to revitalize certain areas of the downtown, to activate the downtown block by block,” Dillabough said. “We think the SoFA has a lot of potential.”

Urban Community has been working on this deal for more than a year, the company said.

“This property will be a great addition to the other properties in our SoFA district portfolio as we move forward with an integrated approach to projects that will enhance the experience of downtown San Jose,” said Jeff Arrillaga, a partner with Urban Community.

Arnie Kamrin, a Los Altos Hills resident, began in 1978 to collect the first of the sites that Dillabough’s firm has now purchased from Kamrin’s groups. Kamrin will continue to work with Dillabough as an adviser to redevelop the property.

“I’ve supported City Lights for decades and the arts for decades, and I’m pretty excited to be working with Gary Dillabough on this site,” Kamrin said. “I want to be sure that City Lights is able to have a home in downtown San Jose.”

Dillabough said it’s his intention that the redevelopment of the site will be fashioned to ensure City Lights is part of the project. For more than a year now, Urban Community has been working with Lisa Mallette, executive artistic director with City Lights Theater, to keep the entertainment enterprise viable.

“We want to maintain what Lisa Mallette has built there already and try to find a way to work with her in the future,” Dillabough said. “City Lights is an important part of the community and they do a great job there.”

Dillabough said he and his partners wanted to complete the property deal even amid the widening woes spawned by the coronavirus panic.

“This is a challenging time, but our hope is that we all kind of stay on mission with our development plans,” Dillabough said. “We want to make sure we help San Jose and the downtown to take the next step.”