Sand Hill Property trims ambitions on San Jose “urban village”

Sometimes it only takes three residential towers to raise an urban village.

That appears to be the case for Sand Hill Property, which has trimmed ambitions for an expansion at its El Paseo de Saratoga mall, the San Jose Mercury News reported.

The project is approved for four residential buildings ranging from nine to 12 floors, with some commercial space at each. Now Palo Alto-based Sand Hill Property is eyeing three buildings, with a single-story Whole Foods Market replacing a previously proposed 11-story tower.

The project;’s overall scope remains in line with prior plans, accounting for nearly 1,000 apartment units and 166,000 square feet of commercial space, even with the changes.

The development would rise next to the El Paseo de Saratoga retail center, which San Hill Property bought for $146 million in 2019, before the onset of the pandemic. 

The proposed urban village would take up about a third of the property.

A Sand Hill Property executive attributed the revised plans for the new development to headwinds in an economy roiled by interest rate hikes over the past year.

“We’re chasing a bit of a fast-moving economy here, which has made it pretty challenging to design to,” Steve Lynch, director of planning and entitlements for the developer, said at a public meeting earlier this year.

The project had to bring at least 583 units, and no more than 994 under current city approvals. Any plan to add more units would require an additional environmental review of the project.