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Reawakening Downtown—Again

Business owners hope the city’s newest initiative helps—but they’re not holding their breath.

by Jessica Fromm on Feb 03, 2010
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Since opening its doors in 1958—more than a decade before the phrase “Silicon Valley” was coined or the microprocessor appeared and throughout the technology industry’s bubbles and bursts—Paolo’s restaurant in downtown San Jose has remained a dining destination.

As more than $2 billion was spent revitalizing the city’s core, Paolo’s moved from a small, gable-roofed, one-story wooden building at 12th and Santa Clara streets to the ground floor of a high-rise beside the Guadalupe Expressway. It has weathered downtown’s ups and downs, such as competition from Santana Row and the bankruptcies of San Jose Symphony and American Musical Theatre, both of which drew patrons for pre-show dining. Its location sheltered it from many of the problems with code enforcement and law enforcement and the patchwork of landlords waiting for big paydays that hampered businesses in nearby historic districts.

Throughout it all, the white-tablecloth restaurant managed to stay in business, offering an evolving menu of California-influenced regional Italian cuisine. Today, at the hand of maitre d’ and sommelier Jalil Samavarchian, Paolo’s offerings continue to combine the traditional with the contemporary.

Second-generation owner Carolyn Allen-Samavarchian credits a community philosophy with keeping diners returning. “We all understand and share the philosophy that we can, and will, rise or fall together,” Allen-Samavarchian says, “in spite of the challenges and limitations an economic recession imposes on a small business and its staff.

“This is not the first recession we have survived, and going through the ups and downs over 52 years has taught us a lot.”

It’s no secret that the current recession has cut deeply into downtown San Jose’s nightclubs and restaurants, thinning the pack from the days of Ron Gonzales’ chaotic mayorship.

Over the years, many ventures have infused life into the downtown—the Fairmont, Convention Center, City Hall and HP Pavilion all became institutions of city life, while other efforts missed the mark. But, hey, that’s what happens when Silicon Valley–style entrepreneurship collides with “city planning.” Now, the San Jose City Council has begun to rethink many of its policies and attitudes toward downtown economic development. While falling short of reinvention, the new plan to boost the local economy seems to signal a more commerce-friendly approach to downtown’s battered businesses. Released last week, it aims to spark economic development and create jobs by offering new businesses incentives to locate downtown.

According to the proposal, the city and the Redevelopment Agency will offer perks like tax reimbursements and fee waivers to pump some life into the city’s central district.

“I’m not trying to oversell this thing as the savior, because it’s not,” says Councilman Sam Liccardo, who represents the downtown district. “City Hall isn’t going to save anything. I think what we can hope for is that we’re going to make an incremental difference. I’m not putting out the messiah plan, I’m putting out a program change and thinking about the relationship between the city and the business community.”

New School of Thought

As a professor of urban and regional planning at the Institute for Metropolitan Studies at San Jose State University, professor Dayana Salazar says that the issues that San Jose faces are not unique.

“This is something that San Jose and many cities in the United States have struggled with for years,” Salazar says. “They are seeing a major exodus of businesses. San Jose has been working to bring viable, vibrant retail to downtown since the ’70s, pretty much, with varying degrees of success.”

Salazar points out that downtown San Jose has made progress—much of it in the past couple of decades.

“It’s a very different place then it was when I came to San Jose State back in 1991,” she says, “when basically, if you were to spend any time here after 5pm or 6pm, you’d be pretty much on your own.

“Today, it’s a very different story. The core of downtown San Jose has definitely seen a great deal of infill development. Areas that were vacant now have businesses, and most of these buildings now have ground-level retailers and are in some kind of an active use, vs. simply being parking lots.”

Still, longtime downtown business owners have their own ideas of what the area requires in order to prosper. For many, the key to survival lies in creating a sense of community on all levels: working together with City Hall, small and big businesses, community groups and every member of the public. For Carolyn Allen-Samavarchian, improving the mood and aesthetic character will count for a lot.

“We need an atmosphere which attracts and makes visiting, working and residential living downtown safe, convenient and desirable,” she says. She cites other oft-mentioned examples of conventional wisdom that have yet to get traction: “A more pedestrian-centric, urban-friendly feel; sidewalk cafes with street-side tables; diverse retail stores and boutiques with a few national anchors; more art, galleries and museums, theater and concerts; an upgraded and enlarged convention center.”

Brad Goldberg, managing partner at the newish downtown eatery Billy Berk’s, says San Jose needs to play up its high-tech connection.

“I think about other major cities I’ve been to, and they all have a significant piece that they’re known for—the ocean or the Space Needle or coffee in Seattle, or beer in Portland,” he says. “I think about San Jose, and what’s our claim to fame? It’s technology, computers and innovation. It’s something to be proud of, and I don’t know that we’ve promoted it.”

He says the city also needs more sports teams. “I can tell you this, the Sharks breathe life into this city,” he says. “The relationship that San Jose has with the Sharks is unique. This is how I imagine cities like Pittsburgh feel about the Steelers or how Boston feels about the Red Sox.

“If the city could get more of that—maybe if we could get the ’Niners, not to San Jose but close enough, and if we can get the A’s—it would be fantastic. I mean, it’s a big deal in a city of a million people to have just one sports franchise, and the powers that be know it and they’re working on it.”

He imagines the impact an A’s move would have on downtown and does the math comparing baseball to hockey: “You’re talking 81 games of 40,000 people, vs. 40 games with 18,000 people. I mean, can you imagine? That’s a huge, huge difference.”

Where’s the Hype?

Ben Soriano, owner of South First Billiards and vice president of the San Jose Downtown Association, thinks that what is needed is an intense public relations campaign to promote downtown, along with more redevelopment money going to already established small businesses for things like facade improvements.

“To me, it’s an issue of doing the marketing that needs to be done to really reflect what has been going on in downtown for these past few years,” Soriano says. “I don’t think the public at large understands that there is a thriving community downtown. That it’s not only a nightclub scene but that there are people of all generations who enjoy what goes on downtown, and not just special-event nights but constantly.

“More needs to be done to be that 800-pound gorilla that we are, because, our reputation, as I see it today, does not reflect the vibrancy and activity that is going on downtown.”

Roger Springall, owner of Caffé Trieste, sees San Jose’s empty high-rise apartment buildings as the city’s biggest hurdle to success.

“I moved to San Jose in 1986, and I lived in the Almaden Valley. I took one look downtown and it was horrible, and I never came back,” Springall says. “And a lot of people will say the same thing. Then, three years ago, when I was looking to open up Trieste, I decided to take a look downtown, and I thought, ‘Oh wow, it’s really changed.

“But the economy is so slow, it’s like walking through quicksand. I just need more people, more people living and working downtown, but especially living downtown.”

Springall says that a big reason why his business continues to survive in the midst of the biggest economic slump since the Great Depression is that Caffé Trieste offers all-ages entertainment, including bands, poets and even opera.

Another bean grinder, Nick Taptelis of Philz Coffee, has helped energize the pedestrian-friendly Paseo de San Antonio near San Jose State with coffee strong enough to defibrillate a cardiac patient. The San Francisco–based operation chose downtown over competing locations because “it just felt right.” The cafe draws a cultlike, diverse crowd that ranges from students and open-mic poets with rivets and disks in their ear lobes to businessmen in suits and firefighters who park their engines in the red zone.

Despite the promises of the two most recent mayors to cut red tape, Taptelis sings a common refrain about the permit process. “The city gave me a hard time about opening up,” he says with a shrug.

Taptelis dealt with it the same way he makes drip coffee—“time and patience” and take it in stride. Business gets better every day, he says. “I feel like 10 years from now this city will be popping. There’s a lot of potential here.”

Salazar says that success will come down to getting more warm bodies out and about on the street. To do that, she says, the city also needs to change perceptions.

“It’s really the chariot-and-horse combination, where to some extent you need retail and business to attract people to come downtown,” she says, “but you also need the people to patronize the retail and the entertainment places and the restaurants. If we have that resident population in downtown, retail will come after.”

Because the city has seen numerous plans and strategies come and go over the years, many in the business community question if City Hall’s current effort will actually achieve its aim to “plant the seeds of San Jose’s economic resurgence.”

“I think it’s a good start, but much more needs to be done,” Allen-Samavarchian says. “Expediting permitting is not enough. The approval process is an expensive and convoluted nightmare, especially for small businesses that cannot afford to hire consultants to navigate it for them. It simply should not be that way.”

For his part, Liccardo gets that. “There have been a lot of false starts downtown,” he says. “What I find to be most frequently the cause of those false starts is that we’ve had some wrong-headed approaches to how core urban areas develop organically. We’ve had approaches in the past which have focused on subsidizing large chain stores and chain restaurants. We’ve had periods where we discouraged high-rise residential development and would only insist on offices.

“I think the lesson we’ve all learned is that you have to allow development and business to grow organically in the downtown, and you can’t be choking it with regulations and interventions.”

These new incentives are about getting the ball rolling and not just waiting around for a good business environment to happen magically.

“I think we’ve got a core group of uniquely creative, committed people downtown, who have weathered a lot of storms financially but continue to want to create a vibrant urban center here,” he says. “I can’t help but believe that when the conditions finally do return for growth opportunities, that we are going to be in a great position to finally take off. We’ve learned a lot of tough lessons over many years, but I think the stage is really well set now.”



by Jessica Fromm on Feb 03, 2010
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