T
he Cupertino-based developer, led by Ken and Mark Tersini, received special use permits from San Jose's planning director to construct a seven-story, 176-room boutique hotel at 425 South Winchester Boulevard. The project, known as The Olin Hotel, will replace a gasoline station and restaurant. The hotel will be designed by Lowney Architecture and will have an 85-foot tall building with up to 30 suites in each of its six floors. The slate blue and white hotel will have banks of vertical windows without balconies, according to renderings. KT Urban estimates that the project, located just a few blocks away from Westfield Valley Fair, will take 21 months to complete. The city agreed to allow extended building hours on Saturdays to speed up construction. It is unclear when the developer plans to break ground on this controversial project.
Residents have expressed concerns about traffic, privacy, and the process leading up to the request for amendments to a 2017 urban village plan. An affiliate of KT Urban purchased the site in December 2020 for $7.6 million, while obtaining a $5 million loan from First Republic Bank. The developer initially planned to construct a 65-foot, five-story residential and office building with shops and restaurants. However, the pandemic led to higher interest rates and material costs, forcing KT Urban to shift to a more feasible project.
Mark Tersini explained that for the project to generate a return on investment, the proposed hotel needed to be 20 feet higher than the mixed-use development plans, which required approval from the City Council. To address community concerns about the height of the building, KT Urban redesigned the building to create a larger setback from adjacent homes. Despite these efforts, neighbors remained dissatisfied with the project.
The Planning Commission had initially balked at the plan to build a hotel taller than zoning rules allow. The City Council approved modifications to the height allowances but still required the city's planning director to decide whether to issue the permits. Market conditions have also impacted the hospitality industry, forcing the sale of two of San Jose's most well-known hotels and delays to several approved projects elsewhere in Silicon Valley.
Last year, the City of Santa Clara Planning Commission granted Utah-based Mogul Capital a two-year extension to build its six-story, 396-room hotel south of San Jose's international airport. Two upscale Cupertino projects, including Kimco Realty's five-story, 185-room boutique hotel across from Apple Park, also received three-year extensions. Throckmorton Partners recently opened a student apartment complex in Downtown after Signia by Hilton San Jose sold its 264-room South Tower as part of a partnership with San Jose State University. The university plans to buy the tower at the end of its lease agreement.
The historic Hotel De Anza in Downtown San Jose is set to sell for as little as $10 million, half of what it traded for a decade ago. The potential deal for the 100-room Art Deco landmark at 233 West Santa Clara Street comes as the lodge prepares to reopen after months of closure. The seller and buyer remain undisclosed.
