San Jose planners approve apartment complex in deal tied to historic downtown building

SAN JOSE — The San Jose Planning Department on Wednesday approved an apartment complex linked to an effort by the city to buy a historic downtown building from the developer of the residences. A neighborhood group group is appealing that decision.

The eight-story apartment project, known as The Gifford, would produce 276 apartments at 470 West San Carlos St. An affiliate of Urban Catalyst, a Bay Area real estate firm, is the developer.

Wednesday’s approval arrives on the heels of a preliminary decision by the City Council to pay $3.6 million to buy the Knox-Goodrich building at 26 through 36 South First St. An Urban Catalyst affiliate owns the building and would sell it to the city.

Erik Solivan, San Jose’s housing director, said during a June council meeting that the deals would proceed separately and with sufficient scrutiny.

“These two things are bridged together, but they are not in any way tied together,” Solivan said. “Approval of one does not fast-track approval of the other.”

Stakeholders + Neighborhoods Initiative, a group formed by some residents who live near The Gifford development site, have raised concerns about the project.

“We saw our years of dedication to the city thrown out when a developer made the arbitrary claim that the development would no longer ‘pencil out.’ Where is the proof?” said Kathy Sutherland, president of the group. “The project was not evaluated properly by planning staff. It really comes down to lack of evidence supporting what they claim.”

Sutherland said the planning staff’s decision ignored design standards that considered the views of nearby residents, including a section of the new building that would be directly next to existing single-family homes.

“Urban Catalyst proposes an eight-story building that, by the city’s own analysis, is ‘a building with no setbacks’ at the shared property line with our homes,” Stakeholders + Neighborhoods wrote in a letter.

Stakeholders + Neighborhoods Initiative said typical design guidelines in downtown areas near the Diridon train station require projects to have a step-back arrangement so they don’t loom over existing homes.

The City Council will now need to decide where to uphold the appeal or reject it.

San Jose officials believe the purchase of the historic building and development of The Gifford would greatly benefit downtown.

“The Gifford, along with Urban Catalyst’s Icon-Echo Apartments, Gateway Residential Tower by CORE Developers, and the Bank of Italy conversion to residential units by Westbank, will spur a revitalization” in downtown San Jose, city staffers wrote in a memo to the City Council that was prepared for its June 16 meeting.

Councilmember Anthony Tordillos said the deal will help the city achieve its housing goals and noted that San Jose is buying the building for 60% less than what Urban Catalyst paid.

“This is a slam dunk for the city,” Tordillos said, emphasizing San Jose in 2025 hit only 33% of its targeted mandate for the creation of new housing units. “We need all the housing we can get.”