MUSEUM PLACE PROJECT LANDS NEW INVESTORS
Bay Area realty entrepreneur and venture capitalist Gary Dillabough is leading a group that has joined the partnership seeking to develop the downtown San Jose complex
Museum Place, an ambitious mixed-use proposed project that’s touted as a downtown San Jose gateway, has landed a group of investors led by the entrepreneur who is revitalizing the city’s iconic Bank of Italy building.
Gary Dillabough, a Bay Area realty entrepreneur and venture capitalist, leads a group that has joined the partnership seeking to develop the Museum Place complex— an investment that would provide the capital necessary to build the project.
“This is very exciting, and it’s great to have Gary Dillabough involved,” said Nanci Klein, San Jose’s deputy director of economic development. “Museum Place is a downtown gateway location.”
Current plans for the project call for 210,000 square feet of offices in a four-story building, a 173-room hotel, a 12-story residential tower with 300 dwelling units and a 60,000-squarefoot expansion of The Tech Museum of Innovation.
Both Klein and Dennis Randall, a co-founder and managing director of Insight Realty, which is the principal developer of Museum Place, confirmed the Dillabough-led group’s investment in the development.
Initially, China New Era Group, a China-based business conglomerate, had agreed to be the lead investor, providing it with all the financing necessary to develop the site. In recent months, though, Insight determined that China New Era wouldn’t provide the anticipated financing and investments.
“The capitalization of the project is now complete,” Randall said. “We dropped a group that was originally going to provide the financing. But they didn’t perform, and we have replaced them with local investors.”
Dillabough didn’t discuss any specifics regarding his group’s investment and partnership in the development. However, he noted that he is interested in finding underutilized neighborhoods in downtown San Jose and transforming those neglected areas into vibrant new urban communities.
Dillabough’s partnership in Museum Place also raises the prospect thatWeWork, a provider of shared work spaces for an array of companies, including tech firms, might become involved with the mixed-use development.
That’s because WeWork, Santa Clara County property records show, has bought an ownership interest in the Bank of Italy building and is working with Dillabough on that tower. Multiple people familiar with Museum Place said WeWork is getting involved in the development, which would be located on Park Avenue between South Market Street and South Almaden Boulevard.
Dillabough and Randall declined to discuss whether WeWork would be involved in Museum Place.
The Museum Place project would be a short distance from a Google-proposed transit-oriented community of offices, homes, retail and restaurants, a development of 6 million to 8 million square feet where 15,000 to 20,000 of the search giant’s employees could eventually work. It also would be near the Adobe Systems headquarters complex, a three-building downtown campus that Adobe intends to expand with a fourth office tower.
Dillabough envisions plenty of potential in the Museum Place project.
“You want to find ways to revitalize that whole theater district, which is such a cool location,” Dillabough said. “It needs great retail, great office space and some nice residential. Museum Place could energize that area and create some momentum there.”
The offices in the Museum Place project also would be ideal for a technology company, Dillabough said.
“It could be the best location in Silicon Valley for a tech firm,” Dillabough said.
Down town experts noted that Dillabough can capitalize on ties he has forged in Silicon Valley through his venture capital business.
“Gary Dillabough has awakened a really wellheeled investment community to the great potential of the slumbering giant of downtown San Jose,” said Mark Ritchie, president of San Jose-based Ritchie Commercial, a realty firm.
The landmark Bank of Italy building, located at South First and East Santa Clara streets, is slated to receive a wide-ranging makeover under Dillabough’s leadership. He also has launched an upgrade of an office and retail building across the street from the Bank of Italy tower.
“Gary has the vision and the creativity to fund very important projects for downtown San Jose,” said Bob Staedler, principal executive with San Jose-based Silicon Valley Synergy, a land-use and planning consultancy. “The Bank of Italy project is a link to San Jose’s past. Museum Place is a link to San Jose’s future.