Downtown San Jose developer drops hotel, apartments from massive Museum Place project

The developer behind Museum Place, a 1.4 million-square-foot downtown San Jose mixed-use development and Tech Museum expansion, is simplifying the project, shedding the previously planned hotel and residential units in the project.

Plans submitted this week to the city of San Jose show that investor and developer Gary Dillabough, who took over the project from Insight Realty earlier this year, is looking to reconfigure the previously approved tower by increasing the office space from 250,000 square feet to 850,000 square feet on the 2.3-acre site at 180 Park Ave., where Parkside Hall currently sits.

“The reality of the situation is that when you are trying to build a hotel, residential space and office, you can’t do all three in a world-class fashion, and our belief is that we want to build a world-class office tower,” Dillabough told the Business Journal in an interview Thursday morning.

That means the previously planned 184-room Kimpton Hotel and the 306 residential units that San Jose-based Insight Realty had gotten approved by the city last year would be no more. The project is now estimated to rise to about 19 stories — down from the currently approved 24 stories — and would still include parking and between 15,000 square feet and 20,000 square feet of retail space on the ground level.

Dillabough, who has become a major property owner in Downtown San Jose over the last year-and-a-half after setting off on a buying spree in the area, says he is still interested in hotel and residential projects in the city, just not at Museum Place.

“We still think the city needs housing and hotel uses, but we think they would be better in standalone buildings,” he said.

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