Real estate: Downtown San Jose future housing tower site is bought
SAN JOSE — A busy development group has bought an apartment complex site where the real estate firm is planning one of three residential towers in a trendy section of downtown San Jose.
Developers Gary Dillabough and Jeff Arrillaga, acting through an affiliate, are planning a trio of housing highrises in the South First Area, or SoFA district in the city’s downtown.
Under preliminary plans that have been prepared by Dillabough, Arrillaga, and the company that they head, Urban Community, the projects in the area could bring nearly 400 units of residential housing within the three downtown highrises.
The Urban Community developers have obtained options to purchase sites in downtown San Jose where the three residential towers would sprout, and now one of the options has been exercised with the recent property deal.
The development sites are on the south side of East San Salvador Street between South Second Street and South Third Street, as well as at the just-bought 420 S. Third St. property.
The housing highrises would be built near office towers that are being planned by mega-developer Westbank on what is known as the Valley Title lot. Westbank and Dillabough have formed a development alliance to build five major projects that would usher in dramatic changes to downtown San Jose.
In the recent transaction, the Dillabough and Arrillaga affiliate bought the site of the Metro Gardens Apartments at 420 S. Third St. in downtown San Jose, according to documents filed on April 2 with the Santa Clara County Recorder’s Office.
The development team paid $13 million for the apartment complex property, county public records show.
At the time of the purchase, Atrio 420, the affiliate that the development group controls, obtained $7.8 million in financing from Loan Oak Fund, according to county property documents.
Arrillaga and Dillabough have obtained contracts to purchase the other sites that would be needed for the development of the housing towers.
“The biggest issue we have in the South Bay and San Jose is housing,” Dillabough said
One residential tower would be 23 stories high, another would be 21 stories, and the third, 11 stories high, according to early-stage plans that Dillabough has submitted to San Jose city officials.
The proposals are preliminary, and subject to change, depending on the feedback they receive, Dillabough said.
Dillabough added that this sort of residential development is needed in the Bay Area to attempt to make a dent in the region’s housing crisis.
“We have to build housing that is at scale and in meaningful amounts,” Dillabough said. “We have to create some momentum there.”
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