SAN JOSE – A busy development group has bought an apartment complex on which the real estate company is planning one of three residential towers in a trendy part of downtown San Jose.
The developers Gary Dillabough and Jeff Arrillaga are planning three high-rise buildings in the South First Area or in the SoFA district in the city center through a subsidiary.
According to preliminary plans drawn up by Dillabough, Arrillaga and the Urban Community company they run, the projects in the region could bring almost 400 residential units to the three high-rise buildings in the city center.
Urban community developers have been given options to purchase land in downtown San Jose where the three apartment towers would sprout and now one of the options has been exercised with the recent real estate deal.
The development sites are on the south side of East San Salvador Street between South Second Street and South Third Street as well as on the recently purchased property 420 S. Third St.
The residential high-rises would be built near office towers that are being planned by the mega-developer Westbank on the so-called Valley Title property. The West Bank and Dillabough have formed a development alliance to build five major projects that would create dramatic changes in downtown San Jose.
In the most recent transaction, the Dillabough and Arrillaga subsidiary purchased the Metro Gardens Apartments property at 420 S. Third St. in downtown San Jose. This is evident from documents filed with the Santa Clara County Recorder’s Office on April 2nd.
The development team paid $ 13 million for the apartment complex, according to the county public records.
At the time of the purchase, Atrio 420, the development group-controlled subsidiary, received $ 7.8 million in funding from the Loan Oak Fund.
Arrillaga and Dillabough have received contracts to purchase the other land needed for the development of the residential towers.
“The biggest problem we have in South Bay and San Jose is housing,” said Dillabough
One residential tower would be 23 stories high, another 21 stories and the third 11 stories high. This is evident from early-stage plans Dillabough presented to San Jose City officials.
The suggestions are preliminary and are subject to change based on feedback received, Dillabough said.
Dillabough added that this type of housing development in the Bay Area is needed to contain the real estate crisis in the area.
“We need to build true-to-scale and meaningful homes,” said Dillabough. “We have to create some momentum there.”