Landmark Towers high-rise project cut down to size

MILPITAS >> After several attempts to build what would have been the tallest buildings in Milpitas, a developer has downsized the ambitious plans and received the Milpitas Planning Commission’s OK to build a mixed-use cluster of housing and commercial space instead.

Whatwasonceknownasthe Landmark Towers project — which saw multiple iterations including 23-story twin towers around 250 feet tall with 450 condominiums and 50,000 square feet of commercial space — has been cut to four five-story buildings that will comprise 372 residential units and just over 18,000 square feet of commercial space, according to city staff and reports.

The commission voted unanimously at its Aug. 12 meeting to approve the new project on a three-acre site at 600 Barber Lane. The developer, BDK Capital, is an international fund with U.S. offices in Southern California. The project is being managed by Adept Development, also of Southern California.

“We’ll look forward to having this project in standing, living color,” Commission Chairman Steve Tao said after the vote.

Robert Montaño, the director of development for Adept, said in an interview Tuesday the major shift in plans was mainly about cost, and “rightsizing” the project for Milpitas.

“One of the challenges that we recognized is that over the course of this economic cycle, the costs to construct a highrise tower have increased dramatically,” Montaño said.

He also noted that the market would need to support the costs on the back end.

“To construct a high rise tower, you’ve gotta be north of $1,500 per square foot on sales price in order to help the client get any kind of return,” he said.

“It’s one thing to be ambitious and push the limit a little bit, but it’s completely another to try to deliver something that is two times more than the price per square foot than people would be used to paying.”

The large towers would have also required significant excavation to stabilize the building, which would add to the cost.

“It’s an easier building to build,” Montaño said.

Planning Director Ned Thomas said planning staff and developers have worked together for over a year to shape the revised project.

“I’m sure that the previous one, everyone thought would be a wonderful addition to Milpitas, but it probably was not realistic,” Thomas said Tuesday.

“This is a hard project to talk about without talking about the past,” Kip Dickson, Adept’s design head, said at the meeting.

The project was first introduced in 2008, when the council approved plans from another developer, TP Pham LLC of San Francisco, to redevelop the former site of Billings Chevrolet with an 18-story tower featuring almost 200,000 square feet of commercial space and 375 residences.

In 2009, the council approved a six-year extension of the approvals, and then the development rights were sold in 2014 to real estate investment and development group Singpoli Capital of Arcadia, and joint venture partner American BD, which comprise BDK, for $21 million.

In 2016, the council approved a revamped, bigger version of the project that would have included 450 residences in dual 22-story towers, though the commercial space was cut to about 50,000 square feet.

But BDK had trouble securing the financing for the huge project, which would have surpassed the 129-foot, 12-story Crowne Plaza San Jose-Silicon Valley hotel — the tallest building in Milpitas — by more than 100 feet.

The council granted BDK a two-year extension after it claimed in a letter that “the original planned funding methods” for the towers, including “a substantial amount of capital out of China” were “becoming increasingly challenging” to secure.

BDK also claimed other Chinese investor money couldn’t be counted on because the federal EB-5 immigrant investor program — which allows foreign entrepreneurs to apply for a green card if they invest in commercial ventures and create jobs for U.S. workers — had become “unworkable.”

BDK said if the extension was granted from Milpitas, the firm would secure the money and construction could start by early 2019, with the towers being completed in early 2021, none of which came to pass.

City staff reports say the new project will have 165 studio units, 118 one-bedrooms, and 89 two-bedrooms, 15 percent of which will be affordable units per the city’s code, with up to 5,500 square feet of retail space and 12,800 square feet of office space. It also will have 533 parking spaces in a multi-level, partially underground parking garage.

Joao Anacleto, a senior development associate with Adept, said Tuesday while it’s not finalized, it’s likely the residential units will be rental apartments.

Anacleto said the development construction drawings are still being worked up, and it would be about a year before building permits would be issued. Construction is estimated to take about two years.