SAN JOSE — The city of San Jose officially completed its multimillion-dollar purchase of a historic downtown building in a deal that is linked to municipal approval of an apartment project with hundreds of units.
San Jose acquired the Knox-Goodrich building, constructed in 1889, for $3.6 million from an affiliate of real estate firm Urban Catalyst, according to a staff memo and documents filed on Aug. 7 with the Santa Clara County Recorder’s Office.
City leaders believe San Jose acquired the historic building at a bargain price.
The city’s purchase of the property at 26 through 36 South First St. is tied to the development of a 276-unit apartment complex at 470 West San Carlos St. Urban Catalyst is expected to start development of the complex known as The Gifford in 2027.
The city approved the project in July, but a neighborhood group appealed the San Jose planning staff’s decision. The City Council will now decide on The Gifford’s fate.
Councilmember Anthony Tordillos said during a June 16 City Council meeting that the deal could help the city achieve its housing goals. He said San Jose agreed to buy the building for 60% less than what Urban Catalyst paid.
“This is a slam dunk for the city,” Tordillos said, emphasizing San Jose in 2025 hit only 33% of its targeted mandate for the creation of new housing units. “We need all the housing we can get.”
Urban Catalyst bought the Knox-Goodrich building for $9.1 million in 2019 and city officials are already planning how to make use of the historic building.
“Once acquired, staff will activate the ground-floor storefront in the historic Knox-Goodrich building with a cultural-serving or commercial use,” city staffers stated.
The Knox-Goodrich building has been empty since Lido Nightclub shut its doors in 2019. Urban Catalyst conducted some preliminary construction at the property.
The COVID-19 outbreak, collapse in demand for new office space, and a sour environment for financing new commercial real estate prompted Urban Catalyst to suspend development, according to a staff memo.
The combination of the city’s purchase of the historic building and development of The Gifford apartment project could help fuel an upswing in activity downtown, San Jose officials said.
“The Gifford, along with Urban Catalyst’s Icon-Echo Apartments, Gateway Residential Tower by CORE Developers, and the Bank of Italy conversion to residential units by Westbank, will spur a revitalization” in downtown San Jose, city staffers wrote in a memo to the city council.
The Knox-Goodrich building totals roughly 11,200 square feet. The building is associated with Sarah Knox-Goodrich, who commissioned the building in the 19th century and was an advocate for women’s rights.
“Constructed in 1889, the stone-and-brick building is a rare and significant example of Romanesque Revival commercial architecture in downtown San Jose and reflects the city’s late-19th-century commercial development style,” city staffers wrote.
At one point, Valbridge Property Advisors appraised the building at $2.78 million. Urban Catalyst, however, declined an offer at that price, documents show.
The city’s purchase means it now owns a choice site next to the emerging Fountain Alley area in the historic district.
“The recommended acquisition allows the city to act opportunistically to acquire a very well-situated and historically prominent parcel of land downtown while supporting near-term housing production and ground-floor commercial activation to advance the area’s revitalization,” said the staff report.