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Downtown San Jose resort tower deal nears, could result in housing high-rise

South Tower of the Signia by Hilton resort at 170 South Market Road in downtown San Jose.
(George Avalos/Bay Space Information Group)

SAN JOSE — A outstanding downtown San Jose resort tower might turn into a housing high-rise, relying on the result of an actual property deal that’s headed into its latter phases, in response to the property’s principal proprietor.

The proprietor of the landmark Signia by Hilton San Jose, an 805-room resort that previously operated because the Fairmont San Jose, is actively looking for a purchaser for one of many two towers of the lodging complicated.

Up on the market is the 264-room south tower, which might be transformed to a brand new use. The 541-room north tower would stay a traditional resort, mentioned Sam Hirbod, the principal proprietor of the double-tower resort complicated.

Hirbod mentioned he’s in energetic discussions to promote the southern tower to a purchaser or patrons whose focus can be to transform the high-rise to housing.

Together with housing, long-term lodging stays have been additionally seen as a possible future use of a repurposed south tower, in response to a gross sales brochure being circulated by business actual property agency JLL.

However the notion of prolonged lodging stays within the southern tower has encountered opposition from a coalition headed up by labor leaders, neighborhood teams, arts organizations, the group Silicon Valley Rising and Metropolis Councilmember Omar Torres.

The coalition has raised considerations that the San Jose economic system might endure if the southern tower is transformed to makes use of reminiscent of long-term lodging stays. A traditional resort operation sometimes focuses on short-term stays.

Torres has circulated a memo that asks metropolis staffers to research the impression a conversion to non-hotel makes use of may need on the San Jose economic system. Torres is nervous {that a} conversion might set off the lack of union jobs on the resort.

“It’s vital for our native economic system to protect working-class jobs right here,” Torres mentioned in an interview exterior San Jose Metropolis Corridor on Wednesday. “It’s vital to assist resort rooms in San Jose.”

Torres desires metropolis employees to research the allowing powers town might wield if the south tower is transformed to a non-conventional-hotel use, the impression on the native job market, the San Jose economic system and the income town harvests from resort occupancy taxes.

“The potential sale and conversion of the southern tower to non-hotel use might have ramifications on our Conference Heart, our downtown companies and resort employees,” Torres wrote in his memo. “How will this have an effect on our shared collective imaginative and prescient of a downtown core the place folks can dwell, work and play?”

Torres hopes that town employees can present solutions by the top of Could.

“To take this block of resort rooms out of play may be very short-term pondering and hurts the employees,” mentioned Enrique Fernandez, enterprise supervisor with Unite Right here! Native 19, which represents unionized staff within the resort. “We have now to take a look at the long-term advantages of maintaining the tower as a resort.”

Critics of the plan to doubtlessly convert the tower to non-hotel makes use of argue that long-term company gained’t assist the native economic system. In addition they consider a housing conversion would end in luxurious or market-rate properties, an final result that wouldn’t deal with the brutal scarcity of reasonably priced properties in San Jose.

“Prolonged-stay company usually tend to prepare dinner their meals of their room and spend their leisure time within the resort’s facilities,” the coalition mentioned in an e-mail to this information group. “Because of this they’re much less more likely to discover the native space and spend cash in native companies.”

The coalition leaders say they’re involved in regards to the 200 union jobs on the Signia by Hilton, situated at 170 South Market Road.

“Jobs symbolize the spine of a wholesome downtown economic system, and they need to be put entrance and heart on this dialogue,” mentioned Jean Cohen, government officer of the South Bay Labor Council.

Nevertheless, it seems that an extended-stay resort operation is now off the desk, in response to Hirbod.

“We’re working with a purchaser that may convert the south tower to housing,” Hirbod mentioned. “We made a pivot away from prolonged stays.”

Conversion of the southern tower to housing might carry a number of hundred everlasting residents into downtown San Jose. Plus, the Bay Space and Silicon Valley alike endure from important shortages of residences.

The shift in enterprise methods within the gross sales efforts arose within the wake of notable opposition to the notion of a long-term lodging operation.

The massive drawback going through the Signia by Hilton is the comparatively low occupancy within the 805-room resort, in Hirbod’s view.

The resort sometimes is 30% full, Hirbod estimated. That works out to 242 rooms. And it additionally signifies that if the entire 242 stays have been concentrated solely within the 541-room northern tower, the resort nonetheless wouldn’t be bought out.

All the main facilities within the resort — the foyer, eating places, cocktail lounge, health heart, swimming pool, and enormous and small assembly areas — are all within the northern tower that may stay a traditional resort. Plus, these facilities are largely renovated and upgraded, together with the rooms.

“We spent $65 million to improve and reposition the resort,” Hirbod mentioned. “We now have one of many nicest inns within the western United States. We have now a world-class operator in Hilton.”

Hirbod believes the resort would perform in a extra optimum style if it have been smaller than its present 805 rooms.

“If this deal goes by way of, the resort might be rightly sized and rightly positioned to serve the San Jose neighborhood, enterprise vacationers and leisure vacationers for many years to come back,” Hirbod mentioned. “I’m very optimistic about the way forward for the resort.”

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