By Nathan Donato-Weinstein
Silicon Valley Business Journal 9/13/2013
About a month ago, we told you developer KT Properties had acquired a 1.85-acre parcel in downtown San Jose and would soon formally propose a major high-rise project there.
“Soon” turned out to be Wednesday.
Cupertino-based KT has submitted preliminary plans for a two-tower residential complex for the site, located directly across from San Pedro Square Market. On tap: A total of 612 units and about 13,000 square feet of retail space.
The development adds to a sense of turnaround for downtown’s residential market, coming the same week developers broke ground on the 22-story, $149 million Centerra apartment tower. Another, One South Market – which KT also developed before selling it to Essex Property Trust – is also under construction.
“We think our timing is going to be outstanding, and we’re excited about getting it rolling,” principal Ken Tersini told me on Thursday. “Those projects complement what we’re doing. The market is plenty deep enough and the demographics are lining up nicely.”
The new proposal lays out plans for a 22-story east tower and 20-story west tower aligned along West St. James St. The block is bounded by West St. James, North San Pedro St., West St. John St. and Terraine St. (The historic Fallon House as well as a small residence on Terraine St. are not part of the development.)
The east tower would include 335 units and rise 228 feet. The west tower would include 277 units and clock in at 210 feet tall. Both would wear a similar, sleek glass skin and share a luxe “amenities courtyard” in the middle featuring a pool, bocce court and garden area.
“They’re sibling towers, but not twins,” said Kevin Sauser, a principal with C2K Architecture Inc. in Portland who worked on KT’s other high rise projects – the Axis condo tower and One South Market.
The design is evocative of both those projects, but Sauser adds: “There’s a real freshness to this one. There’s a little newer design language with the light colored accent lines.”
Retail space would run the length of North San Pedro Street, essentially extending the retail dynamic of the successful San Pedro Square Market project, which opened in 2011 and has helped to revitalize the neighborhood.
Still, the design and layout of the project is conceptual and could change. “One thing that’s certain is as we work with the city and stakeholders, the design will evolve much like One South Market’s did,” Sauser said.
The scale of the project is larger than anything recently proposed or built in downtown. Of the four existing downtown residential towers, Axis is the largest, with 329 units.
“Part of it has to do with the site – it can accommodate more units,” Tersini said of the new project, which has yet to be named. “But more importantly is the market. It’s improved so greatly we believe it can absorb that number of units without too much challenge. And the new product that’s going online soon creates a stronger marketplace for us.”
Developers are planning the project so that it could be built in two phases or one. If phased, the taller east tower, at the corner of North San Pedro and West St. James streets, would be built first. The strength of the market will determine which route is taken, Tersini said.
Tersini said the goal is to get through entitlement process in about six months. (Speeding approvals for tall, Type 1 construction projects has been a major rallying cry for councilman Sam Liccardo, who represents the district.)
Tersini declined to say much about the project’s funding strategy. It’s unclear how strong investors’ appetites are for more pricey tall projects in the submarket, but KT Properties has a track record of bringing in financial partners to get them built.
“We’re going to take care of the entitlements,” he said. “Once we do that, we’ll take a look at where the market is and what options are available.”