Urban Catalyst Sale to San Jose Hits Snag

A downtown San Jose apartment project tied to the city’s planned purchase of a historic building has hit a snag after neighborhood opposition prompted another delay in the approval process.

On Wednesday, planning administrators postponed action on Urban Catalyst’s proposed 276-unit development at 470 West San Carlos Street known as The Gifford, the Mercury News reported. The eight-story project was slated for approval on July 8 and has been delayed twice, now scheduled for city consideration on July 22.

The delay comes after residents group Stakeholders + Neighborhoods Initiative argued that project’s design is incompatible with the surrounding area. A letter from the group to the city said that the building would rise eight stories with no setback along a shared property line with neighboring single-family homes, creating an imposing edge that conflicts with downtown design standards near Diridon Station. The organization said it supports new housing, including affordable developments nearby, but objects to what it sees as poor site planning.

“This neighborhood is not opposed to housing,” Kathy Sutherland, co-president of Stakeholders + Neighborhoods Initiative, said. “We have supported hundreds of affordable and supportive housing units within two blocks of this property.”

Urban Catalyst’s apartment proposal has drawn added scrutiny because it coincides with a separate agreement approved in principle by the City Council last month. Under that deal, the City of San Jose would pay $3.6 million for the historic Knox-Goodrich building at 26-36 South First Street currently owned by Urban Catalyst. In exchange, the developer would begin construction on The Gifford next year.

City officials have insisted the two approvals are independent. San Jose’s housing director Erik Soliván told Council members that the building acquisition does not accelerate or guarantee approval of the apartment project, despite the agreements being negotiated together.

City Council member Anthony Tordillos called the Knox-Goodrich acquisition a bargain, noting the city would buy the property for 60 percent less than what Urban Catalyst paid and would add much-needed housing to the city’s stock with the purchase and development agreement.

“This is a slam dunk for the city,” Tordillos said. “We need all the housing we can get.”

Last year, San Jose reached only 33 percent of its required housing creation goal as part of its state-mandated planning requirements. The City of San Jose must plan for 62,200 new housing units by 2031.

— Chris Malone Méndez