Replacing a large historic office building in downtown San Jose with a residential development

The landmarked Banca d'Italia tower in downtown San José could be transformed into a residential skyscraperG/p>

The historic Bank of Italy tower in downtown San Jose could get a new purpose as a residential skyscraper, discussions on which are taking place amid a volatile office market. Turning the prestigious nearly century-old tower into residential space could be a lucrative move for the property, given the Bay Area's housing shortage and the effects of the post-pandemic crisis that have hit the regional office market hard. Built in 1926 in the Renaissance style, the Bank of Italy tower has small floors and cozy offices. Each office has a private window, which means plenty of sunlight for each potential occupant.''"This could be a terrific conversion," said Mark Ritchie, president of Ritchie Commercial Real Estate. "The small footprint of this classic, beautiful building is very suitable for conversion into residential space. "

The owners of this historic building have been discussing the concept at City Hall San Jose, according to several sources, including those with direct knowledge of plans to convert the 14-story structure. The building is owned by an alliance of local development firm Urban Community and Westbank, a leading developer with a global reach. Gary Dillabaugh and Jeff Arrillaga, Bay Area real estate entrepreneurs, lead Urban Community. Dillabaugh, Arrillaga and Westbank declined to comment on the project or could not be''achieved.

Real estate and real estate experts believe the Bank of Italy building on South First Street, near East Santa Clara Street, has great potential as a residential skyscraper. "If that happens, it will attract even more affluent professionals to the downtown San Jose market," said Nick Goddard, Colliers senior vice president, commercial real estate. Despite the current issues affecting the Bay Area office market, experts say the ailing sector will eventually recover, which in turn will strengthen demand for office space in downtown San Jose. "When office markets begin the inevitable recovery, housing in downtown San Jose will be a rich source of talent for city employers and those who''looking for the excitement of an urban environment, but wants to avoid the safety issues in San Francisco,' Goddard said." The concept of converting offices to residential makes sense, said Bob Stedler, executive director of Silicon Valley Synergy, a land-use consulting firm. "Residential conversions will create more activity in downtown San Jose," Stedler said. "If the Bank of Italy building is no longer an office building, it will improve the office vacancy rate and create more demand for office space.

Opposite, on West Santa Clara Street near South First Street, DivcoWest is undertaking a dramatic renovation and modernization of a 10-story office building built in 1910. DivcoWest''has submitted a very preliminary proposal to San Jose city planners to explore the possibility of a non-employment use for the building. The three new potential new uses could be multi-family residential apartments, co-living apartments, or a hotel. Co-living projects sometimes include common areas such as kitchens or bathrooms. Discussions can mean that two long-neighboring office towers can become residential skyscrapers. Additional housing could also support efforts to further develop restaurants, retail, cocktail bars and the bar scene in downtown San Jose in light of the economic turmoil caused by the coronavirus. "We need more residents, more''employees, more business travelers and visitors, more students downtown,' said Scott Neese, a consultant and former executive director of the San Jose Downtown Association." Dillabaugh and Arrillaga, by attracting numerous restaurants, bars and other businesses to the Fountain Alley building next to the Bank of Italy tower, are trying to create a more vibrant atmosphere in downtown San Jose. In addition, additional restaurants and food outlets have begun to pop up on South First and South Second streets. In addition, Urban Catalyst, led by real estate executives Eric Hayden and Joshua Barrows, hopes to create a "restaurant row" in Paseo de San Antonio, where the real estate firm is completing the renovation of the old Camera 12 movie theater on South Second Street. Some of the most''significant changes could come with the transformation of the Bank of Italy tower into apartments topped with its distinctive steeple and dome. "Nothing will help more in the historic district of central San Jose than incorporating light into the Bank of Italy building," Knies said. "And that's turning on the lights in the beautiful spire of this building. "