Developers Envision Homes at Bank of Italy Office in San Jose

Westbank and Urban Community have pivoted from turning the historic Bank of Italy in Downtown San Jose from offices into homes.

The Vancouver and San Jose-based developers have pitched the office-to-homes conversion to city officials regarding the 14-story tower at 12 South First Street, the San Jose Mercury News reported, citing unidentified sources.

The building is now owned by Westbank and Urban Community, led by Gary Dillabough and Jeff Arrillaga. Dillabough and Arrillaga initially bought seven portions that made up the 100,000-square-foot building in 2017 for $27 million.

The Mediterranean Revival and Beaux-Arts landmark, designed by Henry Minton, was built in 1926 for the Bank of Italy, the forerunner of Bank of America. It’s listed on the National Registry of Historic Places.

Plans had called for renovating the office tower, with its distinctive cupula and spire, as part of a proposed Westbank campus. The project would include a new green staircase that will climb the south side of the building, as well as a garden terrace, to include a social club and restaurant.

But as the office market teeters across San Jose and the Bay Area, converting the high-profile tower to apartments or condominiums prove a better option, real estate experts say.

The Bank of Italy Building has smaller floors and cozy offices, each with a separate window — which means plenty of sunlight for every unit.

“This could be a spectacular conversion,” Mark Ritchie, president of Ritchie Commercial, told the Mercury News. “The small floor plates in this classic, beautiful building really lend themselves to residential conversions.”

The concept of office-to-housing conversions makes sense, added Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.

“Residential conversions will create more vibrancy in Downtown San Jose,” Staedler told the newspaper. “If the Bank of Italy is no longer an office building, that will improve the office vacancy rate.”

Additional housing also might bolster efforts to further spur the revival of the restaurant, retail, cocktail lounge and bar scene in Downtown San Jose.

Dillabough and Arrillaga, by signing a slew of restaurants, bars and shops in the Fountain Alley building next to the Bank of Italy tower, are trying to create a more vibrant city.

— Dana Bartholomew