The New York-based developer of the project says it is pulling out of the ambitious project due to the continuing sluggish performance of both the regional and national economies. Palladium has spent more than $3.5 million on the project.
"The market at this time does not support the large, mixed-use project we originally envisioned,'' says Palladium Western Region Partner Ken Wong."While we still believe that the vision we advanced would be an effective way to revitalize San Jose's downtown area, it is unrealistic until a much stronger market returns.''
City officials vowed that the redevelopment of the downtown core would proceed despite Palladium's pullout. "We are going to be starting talks with the other company that was very interested in Downtown,'' says David Vossbrink, spokesman for San Jose Mayor Ron Gonzalez.
The other finalist for the downtown redevelopment project was the Los Angeles-based CIM Group, one of the developers of Santa Monica's 3rd Street Promenade project.
The project would have encompassed five major sites in Downtown San Jose: the block bounded by St. John, Santa Clara, First and Market streets; Fountain Alley along First Street; the parking lot of Zanotto's Market on Second Street; and two parcels along San Fernando Street between First and Third Streets currently occupied by parking lots.
A future developer may have to reduce the scale of the project in order to make it financially feasible. The city has spent approximately $500,000 on financial and environmental analyses for the Palladium project, and a future developer could use much of that work.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
