San Jose buys downtown historic building tied to apartment project

August 11, 2026 - 03:57

The city of San Jose has finalized the purchase of a historic property in its downtown core, a move that clears the way for a long-planned apartment development. Officials confirmed the transaction this week, marking the end of a negotiation process that stretched over several months. The building, which has sat partially vacant for years, will now be folded into a larger mixed-use project that city leaders say is critical for boosting the area's residential population.

The acquisition is part of a broader strategy to repurpose underused structures near the city center rather than relying solely on new construction. The building's age and architectural character had made it a point of contention in earlier proposals, with preservation groups pushing for adaptive reuse instead of demolition. The final agreement keeps the facade intact while allowing for a taller residential tower behind it.

Funding for the purchase came from the city's affordable housing fund, a detail that signals the project will include a significant number of below-market-rate units. The developer, who has not been named in the official release, will lease the land from the city under a long-term ground lease. Construction is expected to begin in early 2026, with a projected completion date of 2029.

The project has drawn mixed reactions from local business owners. Some see it as a necessary step to bring foot traffic back to a stretch of downtown that has struggled since the pandemic. Others worry about the disruption of construction and the potential for rising rents in the surrounding blocks. City staff have said they will hold community meetings in the coming weeks to address those concerns.

This deal is the latest in a series of public land purchases aimed at accelerating housing production in San Jose, which faces a shortfall of tens of thousands of units. The historic building will be integrated into the new development, with retail space on the ground floor and residential units above. A small public plaza is also planned for the corner lot, a nod to the building's original role as a gathering place in the early 1900s.