Westbank teams up with Gary Dillabough in downtown San Jose

SAN JOSE — Mega-developer Westbank has teamed up with realty entrepreneur Gary Dillabough to develop or upgrade six key projects in downtown San Jose, supplying a big boost for the urban core of the Bay Area’s largest city.

The transactions also enable WeWork co-founder Adam Neumann to divest his holdings in projects being led by Dillabough.

The Bank of Italy office tower, the Museum Place site, the Valley Title property, the site of the now-shuttered Bo Town Restaurant, the Davidson office building, and a big surface parking lot along Fountain Alley behind the Bank of Italy building have landed new investments in a string of transactions valued at $184 million, according to Dillabough and Santa Clara County public records.

“Westbank’s investment in San Jose highlights growing interest from globally renowned companies who prize iconic design, sustainable development, and impactful city-building,” San Jose Mayor Sam Liccardo said. “Their experience in cities such as Vancouver, Toronto, Seattle, and Tokyo, shows bold vision and attention to detail.”

Canada-based Westbank, a development firm led by Ian Gillespie, has built Vancouver’s tallest tower at 62 stories and is the developer of a much-anticipated project called Vancouver House.

“We have been talking to Westbank for almost a year now,” Dillabough said Thursday. “Ian Gillespie works with the best architects in the world. You are going to see some great designs and developments in downtown San Jose.”

Westbank has plenty of expertise in office, retail, residential, and mixed-use projects.

“Ultimately our goal for downtown San Jose is to create a community for the creative economy that brings companies out of their existing ‘industrial parks’ and integrates them within the city’s urban fabric,” said Gillespie. “Our ambition is to demonstrate how strong city-building can help address some of our greatest challenges.”

The new Westbank-Dillabough ownership group landed $193.5 million in financing from Acore Capital Mortgage, which had previously provided financing for properties owned by Dillabough’s Urban Community development and realty investment firm.

Property experts believe the Westbank involvement is a bright sign for the downtown area.

“This shows there is still a lot of investment interest in downtown San Jose,” said Erik Hallgrimson, a vice chairman and broker with Cushman & Wakefield, a commercial real estate firm.

This also means two closely watched projects seem likely to move ahead at an increasingly brisk pace.

“We are going to finish the renovation of the Bank of Italy building and we will soon be starting on Museum Place,” Dillabough said.

The Bank of Italy building, a historic office tower at 12 S. First St., has been undergoing a wide-ranging renovation inside the downtown landmark.

The Museum Place project, located at 180 Park Ave. next to The Tech museum, is envisioned as an office tower that would total 850,000 square feet and replace the aging Parkside Hall.

“We are going to begin very soon with Museum Place,” Dillabough said.

The efforts by Dillabough and his Urban Community company to land Westbank as a partner and orchestrate the exit of Neumann are expected to place the six projects on a much more sturdy financial foundation.

“Urban Community has landed on its feet with Westbank,” said Scott Knies, executive director with the San Jose Downtown Association. “Westbank is an experienced big-city urban developer. They know what they are doing.”

The new ownership group paid $113 million for the Valley Title lot near East San Carlos Street and South First Street, $33 million for the Bank of Italy tower at 12 S. First St., $27 million for the Fountain Alley parking lot that fronts on South Second Street near East Santa Clara Street, and $11 million for the Bo Town property at 409 S. Second St. near East San Salvador Street, the county documents show.

The new owners have an option to purchase the Davidson office building at 255 W. Julian St. Dillabough has proposed an office tower of 650,000 square feet at the site, which is a gateway to the downtown.

“The Westbank/Dillabough partners clearly have the vision to not only see how great San Jose is today but also to see the incredible opportunity that is before us in San Jose,” San Jose City Councilman Raul Peralez said.

With Museum Place starting to move forward, along with the Jay Paul Co. office tower at 200 Park Ave. that is under construction, as well as the Jay Paul plans for a massive redevelopment of CityView Plaza across the street, a major upgrade beckons along Park Avenue.

“This is an additional catalyst to developing downtown and making the projects under construction viable long term,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consulting firm. “Hopefully we can see more cranes in the air soon.”

Park Avenue is deemed to be crucial because it links the core of downtown San Jose with the Fairmont hotel and the state university to the east with the Downtown West transit village that search giant Google plans near the Diridon train station.

“This area is going to be the new center of gravity for downtown San Jose,” Knies said.


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