SAN JOSE — A busy developer is raising money through an opportunity zone fund to build a new office tower and housing highrise at a choice site in downtown San Jose — and is assembling four properties to build the towers next to each other.
Urban Catalyst, an increasingly busy development firm, is planning a project called Icon/Echo, a downtown San Jose development that will feature an office tower and a residential tower next door.
“We see what is happening in downtown San Jose and we are happy to be a part of that revitalization,” said Erik Hayden, founder of Urban Catalyst. Urban Catalyst was formed to create funds that investors can use to capitalize on tax advantages provided by opportunity zones.
The office tower would sprout at the corner of East Santa Clara Street and North Fourth Street, while the housing development will rise at the corner of East St. John Street and North Fourth Street, according to Urban Catalyst.
San Jose-based Urban Catalyst says the office tower will total 420,000 square feet and the housing component will include more than 300 residential units.
The developer has already acquired one parcel. In 2019, Urban Catalyst paid $15.9 million for a gas station site at 147 E. Santa Clara St. in San Jose. But to build the project as now envisioned, Urban Catalyst must collect and assemble three other key parcels along North Fourth Street between the gas station and East St. John Street.
Urban Catalyst has obtained options and contracts to purchase those parcels.
Two of the properties, one at 49 N. Fourth St. and the other at 77 through 95 North Fourth Street, are owned by affiliates headed by individuals with close family ties to the Swenson development empire. The third parcel, a surface parking lot on North Fourth Street, is owned by a real estate investment firm.
Construction on the residential tower is slated to begin in early 2023. Construction of the office highrise should begin in early 2024. Hayden estimated that both towers should be completed and leased up by 2026.
Urban Catalyst believes the combination of the two towers will help address the Bay Area’s housing needs as well as create an office building with large enough floors to attract a tech company.
The Icon/Echo project, once complete, will emerge a short distance from a future BART station near First Street and Santa Clara Street.
“This project has an ideal location in downtown San Jose on the main drag next to a mass transit station,” Hayden said.
In 2020, Urban Catalyst successfully completed a money-raising campaign that harvested $131 million for the development firm’s first opportunity zone fund.
The second fund is now underway with a target to raise $200 million to help bankroll the office and residential Icon/Echo towers project, according to Hayden.