SAN JOSE — Wide-ranging work is underway to convert a well-known San Jose office tower into housing, a project that could enable rentals of the future residences to begin sometime in 2025.
The project aims to remake the Bank of Italy historic office tower downtown into a residential high-rise with at least 100 apartments. If completed, the transformation would be one of the first successful office-to-housing conversions in the Bay Area. In the wake of the coronavirus pandemic and facing a sluggish commercial real estate market, a number of developers have proposed such conversions, but most are still in the planning phase.
The conversion of the historic high-rise at 12 South First St. is being undertaken by an alliance of Canada-based Westbank, a developer with worldwide reach, and Urban Community, a San Jose-based real estate firm active in San Jose’s downtown district.
“It should take about 14 to 15 months to finish,” said Gary Dillabough, a principal executive with Urban Community, referring to the time needed to accomplish the conversion and building upgrade. Dillabough made the comments in an interview during a block party to spur economic activity in downtown San Jose’s historic district, where the Bank of Italy tower is located.
If that estimate becomes reality, it’s possible that marketing will begin sometime during the latter half of 2025 to enable people to move into the converted housing units.
In January, Dillabough estimated that the offices inside the building could ultimately become “100 to 125” residential units.
The vast majority of the floors — 11 — in the 13-story tower are slated to be converted from offices to housing, documents on file with San Jose city planners show.
“This conversion is very important for the future of downtown San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “Having this important historic building activated will improve the vibrancy of the area. More of these conversions need to happen.”
The high-rise, built nearly a century ago in 1925, is located at 12 South First St. next to East Santa Clara Street.
When Westbank and Urban Community bought the tower in 2019, it was one of several sites the real estate allies purchased in downtown San Jose with the intent to dramatically transform the city’s urban core.
The original plan for the Bank of Italy was a top-to-bottom, floor-by-floor and inside-and-outside renovation and revamp of the tower, a downtown San Jose icon. The building is an example of Mediterranean Revival Beaux-Arts architecture style. The tower is a San Jose Historic Landmark and is on the National Register of Historic Places.
The goal of the revamp was to create a tower offering creative workplaces for small tech companies and startups. Each office would have been relatively small.
However, the coronavirus pandemic, business lockdowns, a sluggish return to the workplace, tech layoffs and a fast-shifting economy forced Westbank and Urban Community to ponder alternative uses.
Housing units instead of small offices became the new plan.
The residences are expected to be developed on floors two through 12, the proposal states.
The project envisions a residential area in the attic level of the tower, which is just below the landmark spire and cupola atop the building.
In recent days, construction crews poured concrete on the upper floor of the tower as part of an upgrade of the elevator system, according to Dillabough and Jeff Arrillaga, who also is a principal executive with Urban Community.
Once the upgrades and conversions are completed, the developers believe they can find an interested audience to occupy the newly revamped residences.
“We believe there is going to be tremendous demand for housing downtown,” Dillabough said.
