Nearly 1,500 homes to be built

NORTH SAN JOSE

22.2-acre development at Seely Avenue would be on former farm site

By George Avalos

SAN JOSE >> A housing development that will create a new neighborhood in north San Jose is set to sprout after a flurry of property purchases that mark a crucial milestone for the ambitious project.

An affiliate headed up by real estate firm The Hanover Co. paid about $78.6 million in three separate property purchases to buy 22.2 acres of land for the development at 2620 Seely Ave., according to documents filed Jan. 31 at the Santa Clara County Recorder’s Office.

Texas-based Hanover Co. then sold about seven of the 22 acres to an affiliate controlled by SummerHill Homes for $73.6 million. At the time of the purchase, U.S. Bank National Association provided construction financing totaling $61.2 million, county records show.

The 7 acres that SummerHill bought will accommodate for-sale town homes that SummerHill will develop, with work starting this month. Demolition and grading would be the first components of the work.

If fully realized, the project near the intersection of Montague Expressway and Seely Avenue would produce about 1,472 homes.

“This is a completely new neighborhood with market-rate apartments, affordable apartments, for-sale town homes, neighborhood retail, and a new city park,” said Erik Schoennauer, a principal executive with Schoennauer Co., a land-use consultant for the development.

Here are the primary components of what would be developed on the north San Jose site, according to Schoennaeur:

• 154 town homes by SummerHill Homes.

• 178 affordable units developed by The Pacific Cos.

• 1,140 apartments developed by Hanover, including 57 inclusionary affordable units.

• 19,000 square feet of neighborhood retail.

• A city park totaling 2.5 acres.

Members of the Sakauye family and Karolewski family sold the 22 acres, county documents show.

The Sakauye Farm site at 2620 Seely Ave. will be preserved. Eventually, the house that marked one of the focal points of the Sakauye family’s decades of farming in the development site will be moved to History Park in San Jose, according to Schoennauer.

“This took a monumental effort to close the purchase of these 22 acres,” Schoennauer said. “The capital markets scrutinize any deal very, very closely. It is a good sign that investment is still looking for opportunities in San Jose.”