Los Gatos Lodge Sells to SummerHill Homes for $78 Million

SummerHill Homes took a major leap in its plans to redevelop Los Gatos Lodge.

The San Ramon-based developer purchased the 8.8-acre property for $78.4 million, the Silicon Valley Business Journal reported. The seller was Los Gatos Lodge LLC, an entity managed by Half Moon Bay resident Keet Nerhan. The price works out to $8.9 million per acre.

The 128-room Los Gatos Lodge, at 50 Saratoga-Los Gatos Road in Los Gatos, was built in 1936 and spans more than 46,000 square feet. The owner had an asking price of $100 million, or $781,250 per key, in 2022.

The town of Los Gatos signed off on SummerHill’s development proposal in March, which includes the demolition of the vintage motel and construction of a 155-unit residential community.

The development is planned as 28 three-story attached buildings with four to six for-sale townhome-style condominiums per building. Each unit would span between 1,300 and 2,200 square feet.

SummerHill Homes will take advantage of the state density bonus, granting the developer the ability to skirt zoning restrictions and receive waivers for certain regulations if their developments include affordable units for very-low-income to moderate-income households. The firm will build 26 below-market-rate condos to meet that requirement. A household of four people in Santa Clara County is considered very-low-income with $100,450 annually.

“It meets that state law requirement, and this is one of the better state law requirements that’s coming to us,” Los Gatos town councilmember Rob Rennie said of the plan.

On the other side of the Bay, in SummerHill’s home city of San Ramon, the developer is building another residential community as part of Bishop Ranch’s transformation from office park to mixed-use community.

That development, a 404-townhome community called City Village, began construction in 2022 and will open next spring; units at the community have already been pre-sold.

— Chris Malone Méndez