SAN JOSE — A huge housing development that will create a new neighborhood in San Jose is set to sprout after a flurry of property purchases that mark a crucial milestone for the ambitious project.
The residential project would produce about 1,472 homes, including affordable apartments, as well as neighborhood retail and a big open park near the intersection of Montague Expressway and Seely Avenue in north San Jose.
An affiliate headed up by The Hanover Co., a major real estate firm, has paid about $78.6 million in three separate property purchases to buy 22.2 acres of land for the development at 2620 Seely Avenue, according to documents filed on Jan. 31 at the Santa Clara County Recorder’s Office.
Texas-based Hanover Co. then sold approximately seven of the 22 acres to an affiliate controlled by SummerHill Homes.
“This is a completely new neighborhood with market-rate apartments, affordable apartments, for-sale townhomes, neighborhood retail, and a new city park,” said Erik Schoennauer, a principal executive with Schoennauer Co., a land-use consultant for the development.
SummerHill Homes paid $73.6 million for the seven acres it bought from Hanover. At the time of the purchase, U.S. Bank National Association provided construction financing totaling $61.2 million, the county records show.
The seven acres that SummerHill bought will accommodate for-sale townhomes that SummerHill will develop, with work starting this month. Demolition and grading would be the first components of the work.
Here are the primary components of what would be developed on the north San Jose site, according to Schoennaeur:
— 154 townhomes built by SummerHill Homes on the roughly seven acres the company bought.
— 178 affordable units that The Pacific Cos. is developing.
— 1,140 apartments being developed by Hanover. These will include 57 inclusionary affordable units.
— 19,000 square feet of neighborhood retail.
— a city park totaling 2.5 acres.
The sellers of the 22 acres were members of the Sakauye Family and Karolewski Family, county documents show.
The Sakauye Farm site at 2620 Seely Avenue 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.”