McDonald’s is closing the North San Jose restaurant

SAN JOSE – McDonald’s decided to close a decade-old San Jose restaurant after failing to land a new lease on a location ripe for future development, the fast-food titan said.

The McDonald’s restaurant at 2040 N. First St. in San Jose is slated to close in late September and end 40 years of operation at this location, which is in the center of one of the most important technology centers in Silicon Valley and the corner of a future huge campus for Google.

“Despite our best efforts, we were unable to reach an agreement with the landlord who intends to sell the property for redevelopment and therefore could not extend the rental terms,” ​​said McDonald’s.

The owners of the restaurant area also own an adjoining property, on which a single 8 motel will be operated around 2050 N. First St. The two lots could be combined into a three-acre rectangular plot of land.

The combined parcels would have ample frontage on North First Street, one of the busiest streets in San Jose.

“It’s not every day that a fast-food site is redeveloped,” said Bob Staedler, managing director of Silicon Valley Synergy, a land use and planning consultancy. “It looks like it’s part of a larger collection of property.”

The restaurant is located next to the light rail tracks and is therefore easily accessible for local transport.

“We’re sad that the restaurant will finally close on September 30th,” said McDonald’s.

The McDonald’s opened in October 1980.

McDonald’s on North First Street was the site of a strike in April by workers seeking safer employment conditions, tightened sanitation and improved social distancing protocols amid concerns about coronavirus exposure.

Chicago-based McDonald’s said its lease on 2040 N. First St. is expected to expire around October 16. Despite intensive negotiations, it became clear that the talks would not lead to a lease that is acceptable to both the landlord and the tenant.

“Our employees are the heart and soul of McDonald’s and we are taking steps to support those affected during this difficult time, including extending benefits and keeping payroll for a period of time.”

The website is just around the corner from where Google rented a huge office campus from legendary development company Peery Arrillaga at the intersection of North First Street and East Brokaw Road.

The proximity of Google, the tech hubs in north San Jose, and the busy transportation and transit corridor of North First Street add value to sites like this one.

For these reasons, it makes sense that a developer would be interested in a land assembly at the McDonald’s site and in nearby parcels.

The Angela Maestri Calabrese Family Trust, based in Walnut Grove, owns the McDonald’s property and the EZ 8 Motel package next to it. Other owners nearby include Technology Credit Union, Ajesh Hospitality, and Esa P Portfolio.

“This is a very good sign that the development appetite for North San Jose has not slowed,” said Staedler.

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