Retail… in downtown San Jose?

For decades, commercial vacancy and retail has been the two most consistent failures of downtown San Jose. But as commercial vacancy rates near 10%, retail has come to the forefront of most conversations these days. The issue has been that the density of residents has remained too low to support the type of retail many city centers offer. Downtown has long stood as the social and cultural center of the South Bay, but it is now entering an unprecedented era in San Jose history. People are flocking to the core, so much so, that two highrise towers are heading towards completion, with several more in the immediate pipeline. Not only are residents moving in, but businesses are establishing themselves, attracted by low rents and proximity to public transportation.

Critical mass is finally approaching, and retail businesses will have to serve more people in downtown than ever before. There are many discussions about retail and how it should manifest itself in San Jose’s urban setting. Some see Apple, Microsoft, Nordstroms, H and M, or other large name brands, as the perfect businesses to attract shoppers downtown. But this is the wrong approach to retail for downtown. Urban retail needs to prioritize the immediate residents and people of the area before attempting to attract those further away. Especially with all the major retail malls: Valley Fair, Santana Row, and Oakridge within 5-7 miles away, downtown San Jose can not compete. But that is not to say retail can’t work. It can, it just needs to be different.

The focus of retail should not be, “How do we get people to come downtown?” It should be “What do we sell to the people that are already here, or want to move here?” By focusing on serving the immediate population with unique shops, small services, grocers, eclectic clothing and lifestyle shops, retail should compliment the diverse city environment. Urban retail should be specific. Large box stores will not work in downtown. People enjoy going to a shopping district and having a variety of choices in clothing, and lifestyle shops. Downtown doesn’t have this type of district… yet. Downtown has already proven that unique venues, concepts, and events attract people. Just as it has for the technology and culinary industries, downtown needs to become a retail incubator.

So how does a retail district form, when the goal is to meld many different small businesses together? The San Pedro Square Market is one example of a micro-retail approach, though on a culinary level. The goal at the beginning was to create an actual market to provide service and groceries for the immediate neighborhood. But ultimately, market forces evolved the concept into a immensely popular epicurean’s delight. A different idea is to create a continuous walking retail paseo or the “paseo retail district.” The foundation has already been laid down, with the popular Paseo de San Antonio. With Philz Coffee as one of the anchoring tenants, the paseo by all accounts is a retail success, though the loss the Blackbird Tavern was tragic.

But what if the paseo became its own retail district? What if it continued north on 4th Street then east on San Fernando, then south on 2nd Street to complete a block? The difficulty is the residential units along 4th street. What if several parking spaces could be turned into retail parklets using shipping containers? The largest and most difficult gap would be the parking lot on San Fernando across from Safeway. This arguably would be very difficult to transition to retail if the owner was unwilling to consent.

Proposed "Retail Paseo" map
Proposed “Retail Paseo” map (Click to to see larger picture)

So how is this retail incarnation different from attempts in the past? Shops. Downtown has found success in restaurants, but retail shops need to be added in order for shopping to occur. Concentration. Just like other incubators, concentrating retail is effective. Shoppers want to go to a single area and have a diversity of choices. By concentrating dozens of shops, it creates a retail cluster, a district. Signs. Posting signs along the route announces the area, and helping to promote the different shop locations, informing and encouraging shoppers to turn another corner in search of more shopping. Along with the signs, the sidewalks could be converted to paver stones to mark and extend the retail pathway creating continuous block. Community. The creation and survival of this project would need a group effort from the community and city. The city would need to come together with property owners and small businesses to actively plan out how to attract the right businesses for such a district. Also the city would need to be open to shipping container parklets. Marketing. Targeted marketing for this project would be essential. Retail has had little success in downtown, so the marketing would need to convey that something new in urban retail has come to downtown.

Yet not everything is improving rapidly in downtown. Despite all downtown’s momentum challenges continue. Within the last several months, Los Gatos Brewing Company, Grub Shack, South First Billiards, Falafel Bar, Azucar and Spartan Bar all closed or announced closing(South First Billiards is looking to relocate within downtown). And two places along the proposed “paseo retail district,” Blackbird Tavern and Discover San Jose, have closed too. Numerous blocks have empty storefronts and recently built residential towers are still struggling to fill ground floor retail spaces.

But there have been successes as well. The pop-up retail project over the Christmas season was a big step from the city to promote new urban retail(Not coincidentally, the location was along the Paseo de San Antonio). With the pop-up project it proved the the city is willing, and the retailers are beginning to show interest as well. Just as with the corporations, and residents, retail will come to roost. It may be in the form of the “paseo retail district” or it may not. But it will be how the city and community effectively plan this retail that will ultimately prove the continued failure, or lasting successes in downtown.

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7 thoughts on “Retail… in downtown San Jose?

  • doug matsom

    the only reason you see commercial vacancy rates near 10%, is that San Jose is giving away store space at close to free rent just ti create the illusion of businesses success in this area.
    When in fact most of these “discount renters” close up shop & move after about a year when the rent discount expires. downtown redevelopment has been a failure for the last thirty years. this area has been made too expensive for small business to survive with the current rent structure.
    Downtown is still the worst crime area in san jose redevelopment has not changed that. when you go downtown on a friday night or saturday night you are risking your life in this area.
    unless the city leaders are willing to address the problems of CRIME,GANGS, PARKING, and DRASTICALLY LOWER RENTS the downtown redevelopment will continue to suffer a slow costly death.

  • Josh

    Um, yeah… those small handful of pop-up shops are not factored into the 10% figure. I really don’t think the crime level is any different than San Francisco, and most homicides and violent crime are actually in East San Jose, not Downtown. It doesn’t sound like you have been Downtown in a while.

  • Josh

    The SJPD has falsified homicide numbers? Give me a break. I don’t think I can argue with someone wearing a tin-foil hat.

  • Elizabeth Hartman

    This seems a bit confusing to me. If you have ever been downtown you know it is impossible to find parking. The lot in the center of that chart is at capacity EVERYDAY. All of the street parking in that area is packed EVERYDAY.

    So you want to add retail to a place where no one can park their car. And you want to set up the equivalent of a trailer park in the middle of downtown. While there are empty store fronts. With an empty building in the middle of the space (the old Rep Theater).

    I can honestly say I would not go shopping in the slums of shipping container stores; I don’t shop downtown for third world stores.

    • doug matsom

      (the old Rep Theater).
      this is the perfect example of our city government wasting tax money on projects that the public clearly doesn’t want!
      like the purposed permanent homeless camp that the city counsel .

      another would be the A’s coming to San Jose ( other than one fat IBM manager who do0esn’t want to drive to Oakland) the public doesn’t want this – nor do we want to pay for the worst team in baseball.

      Elizabeth I agree 100%

    • Josh

      I have yet to see the parking structure underneath The Market full. The Pavilion lot can fill up pretty quickly, but there is always plenty of space in The 88.

  • SJcity

    Just found your blog, great article. I’ve always wondered why SJ’s downtown was so lackluster.
    I’ve heard there are limits to the height of building due to SJC being so close by. In my opinion this really limits SJ in the sense that you don’t feel like you can get lost in a sprawling urban environment that a city like SF can give you. Many people, myself included, are drawn to that.
    The lack of a good centralized spot to shop, eat, and/or just hangout really pulls away from the experience of living in a big city. (San Pedro’s okay, but nothing special)
    I’m a student at SJSU and had never been to San Jose before I enrolled but after living here for two years I am underwhelmed.
    However seeing things develop and watching a city grow is exciting to say the least. I’m hoping SJ can keep the ball rolling so I can eventually be proud of being from the city of San Jose!

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