Genesis Pitches 800 Affordable Rentals After Hotel Flop

Genesis Commercial Capital has upgraded plans to add 800 affordable apartments on a site approved for a 200-room hotel in north San Jose.

The developer led by David Kim based in L.A.’s Koreatown has revised its development plans to build 804 affordable apartments at 7 Topgolf Drive, in the Alviso District, the San Jose Mercury News reported. Its initial plan didn’t specify the number of affordable units.

The firm had filed preliminary plans last month to use the builder’s remedy provision in state housing law to automatically approve projects with affordable housing in cities such as San Jose that fail to certify their state housing plans.

Plans call for eight apartment buildings on 3.2 acres, and Genesis Commercial now wants to make each unit affordable for households that earn up to 60 percent of area median income, according to the Mercury News.

“It is an interesting time when an affordable housing project in North San Jose is a higher and better use than hospitality,” Bob Staedler, principal executive with Silicon Valley Synergy, told the newspaper.

Genesis Commercial’s preliminary proposal came after South Korea-based Pine Tree Investment & Management bought the lot at the end of a foreclosure proceeding for $27.6 million.

Pine Tree is an affiliate of KEB Hana Bank, based in South Korea, which had loaned money to the property’s previous owner, Mirae Asset Global Investments. Mirae’s loan went into default in October of last year.

Mirae paid $22.5 million in 2019 for the boomerang-shaped site, north of Highway 237 and the Guadalupe River, next to the Topgolf San Jose driving range. That year, it won approval for the hotel project, which then stalled during the pandemic.

The proposed hotel, to include a 15,400-square-foot retail building, was eyed for development by Shilla Stay, an affiliate of Samsung Group.

It would have benefited from Topgolf San Jose, a high-tech driving range nearby that opened in 2021 and has been a steady draw as an entertainment, sports and dining attraction. It is located at 10 Topgolf Drive.

The new affordable housing plan is not the only area hotel proposal to end up getting turned into something else as of late.

Terra Ventures, which had planned to build restaurants, shops and two hotels near the Topgolf range, has instead filed plans to build a three-story power building and two-story data center at Topgolf Drive and North First Street.

— Dana Bartholomew