San Jose Opportunity Zones Are Heating Up. This Investor Has Big Plans.
With three milestones just before the end of 2019, opportunity zone investor Urban Catalyst appears poised for quite the 2020.
Last month, the Silicon Valley Opportunity Zone fund announced it had acquired the inoperative Camera 12 movie theater for redevelopment, and that it had commenced serious planning efforts for two of its other downtown San Jose sites: its Keystone property at 491 West San Carlos St. and 147 East Santa Clara St.
At the Keystone property, the OZ investor will tap into what is a largely underserved extended-stay, select-service hotel market in downtown San Jose, Urban Catalyst Chief Operating Officer Joshua Burroughs said. The developer has submitted a site development permit to build a 170-room Marriott TownePlace Suites and plans to break ground this year.
"We wanted to have a select-service hotel in our portfolio, and when we were looking for sites, we were wanting to have one in the Downtown West area where Google is going in with their mega-campus," Burroughs told Bisnow. "We also like the proximity to Adobe's world headquarters as well."
TMH Hotels will come on as hotel operator for 491 West San Carlos St. when it opens, which Urban Catalyst expects to happen in 2022.
On East Santa Clara Street, Urban Catalyst is in the earlier planning stages for "The Icon," a 28-story transit-oriented development it hopes to build in a partnership with Dutchints Development Managing Director Vahe Tashjian. For that site, the joint venture has submitted preliminary plans to develop over 300 units and 120K SF of office about 100 yards from the planned downtown San Jose BART station.
"We wanted to have a diversity of uses given the access to a major transportation investment," Burroughs said of the tower, which it expects to break ground on next year.
Where Urban Catalyst may be getting the most creative is in its redevelopment of the Camera 12 property, where it is readying to begin demolition to make way for 65K SF of office and negotiating with tenants for 20K SF of ground-floor retail.
Urban Catalyst will position the office component for tech companies, while still "working within the existing framework of the building," which includes floor-to-ceiling heights of over 20 feet per floor, according to Burroughs.
"We're looking at how we can reposition the ground floor to be active retail and re-tenant that," he said. "And we're creating an office lobby on the ground floor as well."
Urban Catalyst acquired the 201 South Second St. property last month for $24M from a group of developers including Gary Dillabough, Jeff Arrillaga and Don Imwalle. It plans on breaking ground in the second half of this year.
Aside from its string of moves last month, Urban Catalyst has a handful of other projects in the works or planned.
It submitted a site development permit for its Fountain Alley Building at 26 and 30 South First St. in September with plans for 73K SF of office and 14K SF of retail. The following month it entered the early planning stages on Madera @ Google Village, an 80-apartment complex it plans to build with cross-laminated timber.
Adjacent to Madera, Urban Catalyst plans to build 75 units of senior living split between memory care and assisted living at 470 West San Carlos St.
Even with its diverse range of properties, Urban Catalysts projects have one thing in common as a result of the developer's bullishness on downtown San Jose, according to Burroughs.
"All of our projects in our portfolio are within walking distance of each other," he said.