Iconic San Jose destination Santana Row reaches 20th anniversary

It takes more than a financial crisis, recession, the coronavirus and economic uncertainty to put a permanent dent in the fortunes of San Jose's Santana Row.

SAN JOSE — It takes more than a financial crisis, recession, the coronavirus and economic uncertainty to put a permanent dent in the fortunes of San Jose’s Santana Row, an iconic village that’s marking its 20th anniversary.

Federal Realty Investment Trust, the principal developer and owner of Santana Row, has for many of those 20 years deployed a mix of property types to help the center to navigate around economic potholes that can wreck real estate ventures.

Santana Row’s 20 years, with the official anniversary date on Nov. 7, serves as a reminder that Federal Realty has crafted the 42-acre village for more than just short-term operations.

“We built Santana Row and our other centers to keep them forever,” said Jan Sweetnam, president of Federal Realty’s western division, which includes the San Jose village. “We think short-term, medium-term, long-term. We think about our position in San Jose and Silicon Valley.”

With 100 merchant establishments, Santana Row does more than offer patrons the retail and restaurants that are the familiar staple of any major mall. The open-air complex has evolved into a full-scale village that also contains homes, office spaces, entertainment spots and hotel facilities.

“The secret sauce is a blend of all the product types in the right mix,” said Collette Navarrette, Federal Realty’s senior director of marketing. “You have the retail and the restaurant spaces and you mix in residential and office. That’s what fuels the vibrancy. It creates a neighborhood.”

Yet the sauce that helped produce this San Jose neighborhood is more than a collection of different property types.

The street grid at Santana Row is also a crucial piece of the center’s success, an 11-page research paper written in 2010 about Santana Row suggested.

Key aspects of the layout and orientation of Santana Row’s streets caught the eye of Pallavi Saxena, who in 2010 was a transportation planner with engineering firm Hatch Mott MacDonald.

“All the activities along the streets of Santana Row are oriented such that they face the street,” Saxena wrote in the paper about the center. “This design feature strongly encourages a pedestrian environment and gives a sense of safety to its users.”

From the outset, Saxena argued in the paper, Santana Row was fashioned with a vital component of any successful neighborhood: People are encouraged to meander along the center’s streets.

“The pedestrian streets are designed in such a manner that they tend to be the main civic space in the neighborhood,” Saxena wrote in the research paper. “Housing units, retail stores, human activities, events, and open restaurants all have been oriented to the street.”

And cities such as Mountain View and San Ramon, aiming to create new neighborhoods, have pushed ahead with centers that experts say echo Santana Row.

In very recent years, the coronavirus provided Santana Row with perhaps its most unique and complex challenge. Yet even in this instance, Santana Row’s open-air and pedestrian-friendly settings created pathways to survival — and even success.

Santana Row patrons could pick up meals and products at designated outdoor spots during the times when government restrictions temporarily prohibited indoor shopping or meals.

Dining outside became a familiar scene at Santana Row during much of 2020 and 2021, scenes that persist in 2022, even with the resumption of indoor meals.

Santana Row’s response to the coronavirus wasn’t the first time Federal Realty managed to parlay an apparent setback into a successful gambit.

In the early years of Santana Row, the center struggled to recruit retail tenants for the second and third floors of buildings along and near Stevens Creek Boulevard.

Second-floor retail often works in a vertical borough such as Manhattan but is typically shunned by California consumers except in limited circumstances. Third-floor retail is nearly unheard of in the Golden State.

“We were having a really hard time leasing those second- and third-floor retail spaces, which was around 2004 and 2005,” Sweetnam recalled. “We ended up turning the upper-floor retail into office space. That’s when the light bulb came on that office users wanted to be in this type of location and environment.”

Federal Realty wound up developing two modern office buildings at the south end of Santana Row that became magnets for tech firms.

Splunk leased one of the buildings and NetApp leased the other building as the company’s corporate headquarters.

Federal Realty intensified its office development with the One Santana West building across the street from Santana Row.

The evolution of Santana Row continues. In April 2022, Federal Realty sketched out plans for a vast revamp that could add four new office towers to Santana Row.

“It feels inevitable that there will be densification at Santana Row,” Sweetnam said. “The idea is to bring more customers who want to be here. We’re planning for the future and the future still feels awfully bright.”

While gleaming new office buildings and their tenants are high-profile additions, Santana Row continues to gain retail and restaurant tenants. Santana Row recently disclosed it had landed 15 merchants.

“Yes, there is still e-commerce, but with the top brands we have at Santana Row, we can offer customers a great experience,” Navarette said. “We have seen Santana Row evolve and thrive over 20 years. The right blend of retail, residential, dining, and now offices, has really created an engaged neighborhood.”