Lender seizes former San Jose store site, housing project property

Lender seizes former San Jose store site, housing project property

Briefly

"SAN JOSE - A downtown San Jose site where a housing tower was once proposed but never built has been seized. At 27 S. First St., an empty building has been taken back through a deed in lieu of foreclosure, a procedure for a lender to take ownership of a property in a streamlined fashion. San Jose officials previously approved a proposal to develop a 24-story, 374-unit housing tower on the parcel, which has frontages on South First Street and Lightston Alley between West Santa Clara Street and West San Fernando Street."

"The project never broke ground, even though the housing tower's developer, a group led by Alterra Worldwide and real estate executives Tony Bader and Mike Sarimsakci, pursued both conventional financing plans and more exotic funding vehicles to attract money to build the homes. In 2021, the project's owners attempted to coax investors to raise $100 million to finance the tower by using a security token offering, a digital system that would have enabled investors to buy small chunks of ownership in the development. Nothing came of the funding efforts, however, and the building remained empty."

""27 South 1st St. is one of the most challenging development sites in downtown San Jose," said Bob Staedler, principal executive with Silicon Valley Synergy. "The narrowest part of the parcel is only about 78 feet wide, with properties tightly surrounding it on both sides." The building was once occupied by an F.W. Woolworth Co. department store. More recently, Ross Dress for Less operated one of its discount apparel stores at the property. In 2016, Ross closed its doors. After Ross exited the building, the property became a pop-up enclave for local artists operating through the Local Color organization."