CityView Plaza, 3.4M SF San Jose Project, Plans Long Delay

Another downtown mega-project in San Jose is faced with uncertainty after the developer signaled it will push back the timeline for construction—for up to five years—as demand for tech office space lags in the heart of Silicon Valley.

An affiliate of Jay Paul Co. has asked city planners for a five-year extension of its permit to redevelop CityView Plaza and adjacent parcels into a massive 3.4M SF tech complex anchored by three, interconnected 19-story office towers with retail and restaurants.

SJ Cityview LLC, an affiliate of San Francisco-based Jay Paul, currently has a development permit that expires in June 2025 for a site bounded by South Almaden Boulevard, West San Fernando Street, South Market Street and Park Avenue.

The five-year extension requested by the firm would push the expiration date for the development permit to June 2030, according to a report in the San Jose Mercury News.

Jay Paul, which completed a 19-story, 971K SF office tower last year at 200 Park Avenue across the street from the CityView site, said in its filing that current market conditions have rendered the 2025 construction deadline for the redevelopment of CityView Plaza “untenable.”

“Current financial markets and a reduced demand for office leasing have made the short-term leasing feasibility of this project untenable within the currently defined timeline,” Jay Paul’s filing said, according to the report.

The Jay Paul affiliate bought the original 580K SF CityView Plaza complex for about $284M in 2018. A year later, the developer paid $100M for adjacent parcels at 200 Park Avenue and 282 South Almaden.

A year ago, Google postponed the groundbreaking for an 80-acre Urban Village in downtown San Jose. The project, known as Downtown West, planned to include more than 4,000 homes, 7.3M SF of offices, and 500K SF of shops and restaurants in the neighborhood near Diridon Station.

In November, Google and Lendlease terminated a partnership to develop four huge Bay Area projects, including Downtown West, two projects in Mountain View and one in Sunnyvale.

“The decision to end these agreements followed a comprehensive review by Google of its real estate investments, and a determination by both companies that the existing agreements are no longer mutually beneficial given current market conditions,” Lendlease stated.

Google said last fall it intends to eventually move forward with Downtown West. The tech giant has not issued a new timeline for the delayed project but in February announced a new phase of demolition for part of the site: the former Orchard Supply Hardware complex at 720 W. Sam Carlos Street is expected to be torn down by the end of May.