San Jose housing and grocery plans emerge at long-time shopping center

SAN JOSE — Plans for new housing towers have emerged as part of the latest shift for a proposed village that could sprout on sections of a long-time retail, restaurant and entertainment complex in San Jose.

The new residential buildings would be developed as part of a fresh proposal for a village that is being eyed at El Paseo Shopping Center in southwest San Jose, documents on file with city planners show.

The latest plans envision three new residential buildings consisting of two towers with market-rate apartments and one mid-rise building geared toward seniors.

All told, the three buildings, including the senior living complex, would produce 867 residential units in the village that is being proposed at El Paseo Shopping Center in San Jose.

Here are the details of the three new residential buildings in the El Paseo project:

— A 12-story building consisting of 376 residential units and 13,500 square feet of ground-floor commercial space.

— A 10-story building with 371 housing units and 15,500 square feet of ground-floor commercial space.

— A seven-story building would consist of a 120-unit senior assisted living facility.

The planned transformation of El Paseo Shopping Center began in 2019 when Sand Hill Property paid $146.6 million for the retail, restaurant and movie complex at the confluence of Saratoga Avenue, Lawrence Expressway and Quito Road.

El Paseo Shopping Center is being reworked as a smaller version of the iconic Santana Row destination village in San Jose.

The new residential buildings are being proposed because Sand Hill Property had to scrap a proposal for a mixed-use highrise on the site that would have consisted of a Whole Foods Market on the ground floor and a tower of residences stacked on top of the grocery store.

Construction lenders nixed the idea and forced Sand Hill Property to propose a conventional stand-alone grocery store on that site.

The housing units that would have been built atop the grocery store were reconfigured as two new highrises and the senior citizen residential center.

The revised proposals have triggered a legal challenge from a citizen’s group.

Among the project’s political and legal milestones:

— In June 2022, the San Jose City Council approved the overall concept of the redevelopment, including the Whole Foods store totaling 43,000 square feet.

— In July 2022, Citizens for Inclusive Development filed a lawsuit to challenge San Jose’s approval process. The group’s big objection: The city, while noting that the commercial space would include a grocery store or a supermarket, didn’t specifically reveal the store would be a Whole Foods Market.

— In August 2023, a Santa Clara County judge ruled against the group and in favor of the city of San Jose.

— On Sept. 27, the group appealed the county judge’s decision to the state Court of Appeal. The state court has yet to act.

While that has been going on, the city, as required by its own rules, continues to move the final and revised environmental review process forward.

Erik Schoennauer, a land-use consultant for the redevelopment, said the reconfiguration of the Whole Foods building as a single-tenant grocery store makes it easier to land construction financing for the structure.

“The project is simplifying the uses in each building so that the project can achieve financing and begin construction,” Schoennauer said.