# City may buy San Jose building to help spur housing project nearby > Source: > Published: 2026-06-15 14:04:09+00:00 **Getting your** [Trinity Audio](//trinityaudio.ai)player ready...SAN JOSE — The city of San Jose might buy a historic downtown building in return for a commitment by the property’s owner to build an apartment complex with hundreds of units nearby in the city’s urban core. San Jose officials are eyeing the purchase for $3.6 million of the [Knox-Goodrich historic building on South First Street](https://www.mercurynews.com/2019/04/02/big-facelift-planned-downtown-san-jose-historic-lido-night-club-site-google-adobe/) in downtown San Jose. Bay Area developer Urban Catalyst would sell the building to the municipality, according to a city staff memo. As a key condition of the city’s purchase of the building, at 26 through 36 S. First St., Urban Catalyst would begin construction in 2027 of a 276-unit apartment complex several blocks away at 470 Gifford St. in San Jose, city public documents show. If the city’s gambit to buy the Knox-Goodrich building from Urban Catalyst unfolds, the real estate firm would be obliged to complete a permit process by the end of 2026 on the eight-story Gifford Apartments on the western edge of downtown San Jose. What’s more, Urban Catalyst would be required to launch vertical construction on the eight-story Gifford site by the end of next year. As a sweetener for development of the Gifford Apartments, officials will recommend that the residential hub be granted admission into San Jose’s downtown incentive program. City leaders crafted the downtown incentive program to stimulate growth in the city’s urban core by cutting construction taxes, park impact fees and permit costs for developers. Urban Catalyst bought the Knox-Goodrich building in 2019, paying $9.1 million, city officials stated in a staff report. San Jose economic development director Jen Baker, housing director Eric Solvan, and budget director Jim Shannon signed the memo. Following the Knox-Goodrich site purchase, Urban Catalyst won city approval of a six-story mixed-use office and commercial building that would have featured ground-floor retail and a rooftop restaurant. Urban Catalyst began some preliminary construction on the South First site, which has been empty since the Lido night club shut its doors in 2019. The coronavirus outbreak, collapse in demand for new office space and a sour environment for financing new commercial real estate prompted Urban Catalyst to suspend development of the Knox-Goodrich property, according to the San Jose staff memo. The combination of the city’s purchase and the apartment project development could help fuel an upswing in vibrancy for San Jose’s sluggish downtown. “The Gifford, along with Urban Catalyst’s Icon-Echo Apartments, Gateway Residential Tower by CORE Developers, and the Bank of Italy conversion to residential units by Westbank, will spur a revitalization” in downtown San Jose, city staffers wrote in a memo to the city council. Once San Jose completes its purchase of the Knox-Goodrich building, the city intends to hold back in escrow $975,000 of the money the municipality is paying until Urban Catalyst accomplishes the development metrics regarding the 470 Gifford apartments, the staff documents show. The Knox-Goodrich building totals roughly 11,200 square feet, city officials reported. The building is associated with Sarah Knox-Goodrich, who commissioned the building in the 19th century and was an advocate for women’s rights and suffrage. “Constructed in 1889, the stone-and-brick building is a rare and significant example of Romanesque Revival commercial architecture in downtown San Jose and reflects the city’s late-19th-century commercial development style,” city staffers reported in the memo. At one point, Valbridge Property Advisors appraised the Knox-Goodrich building at $2.78 million, the city staffers stated. Urban Catalyst, however, declined an offer for the building at that price, the city documents show. If San Jose’s purchase quest succeeds, the city will own a choice site next to the emerging Fountain Alley area in the city’s historic district. “The recommended acquisition allows the city to act opportunistically to acquire a very well situated and historically prominent parcel of land downtown, while supporting near-term housing production and ground-floor commercial activation to advance the area’s revitalization,” the city staffers wrote in the memo to the San Jose City Council. City officials intend to proceed with short-term plans for the building on South First Street should San Jose buy the property. “Once acquired, staff will activate the ground-floor storefront in the historic Knox-Goodrich building with a cultural-serving or commercial use,” city staffers stated in the memo. Officials also envision long-term opportunities for the Knox-Goodrich property. City housing staffers will seek development proposals for the Knox-Goodrich site. The city would make a variety of financing tools, including housing production incentive programs and [master-leasing of affordable apartment units](https://www.mercurynews.com/2026/05/26/home-san-jose-affordable-build-property-economy-real-estate-house-jobs/) in a new project. “The strategy for the parcel’s development is a housing-focused mixed-use project with active ground-floor uses,” city staffers stated. “The goal is to spur a public-private partnership project into construction within three years” at the Knox-Goodrich building.