ROEM affordable project set for North First Street in San Jose
ROEM affordable project set for North First Street in San Jose
by Katherine Conra
Two years after going into escrow, developer ROEM Corp. took ownership last month of four blighted acres on North First Street in San Jose for $13 million.
ROEM's vice president Jonathan Emami describes the proposed 290-unit affordable apartment project as "shovel ready" and capable of generating more than 300 jobs.
But when will construction begin?
“That is up in the air,” Emami said. “It all depends on the financing for the project. But we anticipate a start date within an eight-to-12-month window.”
Workers are tearing down the homeless encampment and dilapidated buildings to clear the site for the four-story project and underground garage that will provide 184 low-income units and 106 senior apartments.
“The entire affordable housing community has been standing on the sidelines waiting to see what happened on the budgets and waiting for the financial markets to improve,” Emami said. “Waiting and hoping.”
Kristen Clements, project development manager for the city, said San Jose loaned ROEM $10 million to buy the land for the project that is estimated to cost almost $90 million. “This is all that we’ve committed to at this point,” she said. “We are not sure of the timing because we don’t have as many resources. We have been working very hard to make some land loans so that limited dollars are stretched as far as possible.”
The builder said the saving factor of his project was that it had been in San Jose’s pipeline for close to two years and city officials, including City Councilman Sam Liccardo and Housing Director Leslie Krutko, were very supportive.
“We’ve had several projects collapse in the last six months because of the frozen state of the financial markets,” Liccardo said. “Fortunately with the diligence of many of our developer partners and with the efforts and leadership of Leslie and the RDA, we’ve managed to keep a few projects alive.”
Steve Hunt, a broker with Colliers International who represented the sellers along with his partner, Parker Jones, said the project will be a catalyst for turning around the neighborhood, and it may even result in a 1-acre park getting built across the street.
“We’ve been working for more than three years on this deal — it’s been in and out of escrow three times,” Hunt said. “The owners bent over backwards to make this happen.”
Emami agreed, calling the 10 investors who sold the property “patient and flexible sellers.” The broker representing ROEM was Herb Fielden of Fielden & Associates.
“This was a team effort,” Emami said, “It wasn’t just us.”
The project also benefited from its location, near the Gish light rail station, as well as job centers on North First. Emami expressed no concern about ROEM’s ability to rent the units once they are built, even though apartments, too, have experienced higher vacancies because of job losses.
“Although the market is in turmoil, there is a dire need for affordable housing,” he said.
Emami said ROEM, founded in 1978, has more than 1,200 units in the Bay Area but builds all over California.
“We are still seeing a strong demand for our units,” he said, “so strong that our developments are at 99 percent occupancy.”
Katherine Conrad can be reached at 408.299.1820 or kconrad@bizjournals.com.