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– Silicon Valley Business Journal
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The Whole Foods market being built on The Alameda in San Jose will soon be joined by a new mixed-use project right next door, as the upscale organic grocer draws more investment into the historic neighborhood.
Chandler Pratt & Partners expects to break ground in spring 2015 on 785-807 The Alameda, a roughly $60 million, transit-oriented development that will include 140 apartments and 20,000 square feet of commercial space, including oﬃce and retail.
The project reﬂects the so-called “Whole Foods eﬀect,” in which the popular store’s arrival spurs development and raises property values nearby. While developers say they would have built the new project without a Whole Foods going in, they concede the market was a big draw. Developers scouted the site starting two years ago, before the Whole Foods started construction but well after the chain was ﬁrst announced for the site.
“It’s not just a grocery store, it’s exactly the one you would want,” said Dan Mountsier with Chandler Pratt, a Burbank, Calif.-based developer that specializes in inﬁll mixed-use projects.
The KTGY-designed project is just one that is contributing to a revitalized neighborhood, one of the city’s most historic. At 345 Stockton Ave., AvalonBay is completing Avalon Morrison Park, an $80 million development that includes about 250 units and is now leasing. The Alameda itself is is also beneﬁting from a $4.5 million streetscape improvement project designed to make the road, one of the state’s ﬁrst and often called “the Beautiful Way,” more walkable.
“I’m really encouraged by the Whole Foods,” said Larry Clark, president of the Alameda Business Association. “The Whole Foods is one anchor tenant, and then you have the anchor businesses on the Alameda. With the new residents, you’ll have a reason to walk from one end to the other.”
For Mountsier, the 28,000-square-foot Whole Foods — slated for completion later this year — isn’t the only attractive thing about the neighborhood. The project is located on the edge of city’s Diridon Station Plan, which envisions bringing dense commercial and residential to the area, as well as high-speed rail and an Oakland A’s stadium.
“We like being on transit and we’re very bullish on the Alameda,” Mountsier said. “It’s a great neighborhood, a community that cares, and it’s poised for a real breakout.”
Chandler Pratt had originally envisioned about 100 units for the project, but expanded the unit count as the company learned more about what’s allowable under the transit-oriented plan. But developers largely kept the same building exterior sizes.
“To make it more transit-oriented, we are having more units, but smaller units,” Mountsier said, adding that such units would likely appeal to young professionals.
The project has received kudos from neighborhood leaders, partly because the underground parking includes a full complement of spaces for retail and residential, even though developers could have reduced that by sharing spaces between the two uses.
“This is the right place for a larger-scale, slightly taller mixed-use development,” said Laura Winter of the Shasta/Hanchett Park Neighborhood Association. “The architecture is smart and contemporary; they’re not trying to make it look like a historic building on The Alameda. It’s a high-end development.”
Developers are also bullish on the building’s commercial component. At 20,000 square feet, that’s a signiﬁcant amount of space. Chandler Pratt intends to split the commercial space about evenly, with ground-ﬂoor retail and second-story oﬃce.
“We think this will meet the needs of entrepreneurs,” Mountsier said of the latter. “We want to have state of the art conference rooms, presentation rooms.”
He doesn’t think the retail will have any problem leasing, given proximity to the grocery store and major draws like SAP Center and Diridon Station.
“We want the retail to be an amenity for our residents and the neighborhood,” Mountsier said. “This isn’t just checking the box on retail.”
While this is the ﬁrst project for Chandler Pratt in the Bay Area, the developer hopes to acquire additional development sites for mixed-use and assisted living projects.
“We’re looking at high-quality inﬁll sites, and we don’t mind taking on some challenges,” Mountsier said.
Nathan Donato-Weinstein covers commercial real estate and transportation for the Silicon Valley Business Journal.