Historic Bank of Italy Tower to Become Housing

Westbank and Urban Community have lined up financing to move ahead with the conversion of San Jose’s historic Bank of Italy tower from offices to apartments, adding a closely watched office-to-housing project in the city’s downtown core. The project will create 109 market-rate units at 12 South First Street, a building that local reports said has sat largely unused since 2017. City Hall has also put public incentives behind the effort, after expanding a downtown housing program to cover office conversions earlier this year. The combination of private financing and city fee relief has made the tower one of the clearest tests yet of whether San Jose can remake older office buildings into housing. ### Why is this particular building drawing so much attention? The Bank of Italy tower is one of downtown San Jose’s best-known historic buildings, and NBC Bay Area reported on April 6 that the 14-story property was the city’s first skyscraper. The building opened in 1909 as a branch of the Bank of Italy, the institution that later became Bank of America, according to NBC Bay Area. Propmodo reported that the current redevelopment officially broke ground this spring, and described the tower as one of the higher-profile office-to-residential projects now underway in Northern California. The project repurposes a landmark that had long been tied to downtown’s commercial core. ### Who is behind the conversion, and what exactly will be built? (nbcbayarea.com) Westbank and Urban Community are the developers behind the conversion, according to multiple real estate and local news reports. The plan is to turn the tower into 109 apartments, with ground-level mixed-use space still part of the property. NBC Bay Area reported that the apartments will be market-rate rentals, with projected monthly rents of about $2,400 to $3,500. (propmodo.com) The same report said move-ins are expected in about 12 to 14 months. Taylor Engineers, which lists the assignment on its website, said the project covers a 125,000-square-foot historic building and is designed as an all-electric residential conversion with retail and club space on lower levels. (nbcbayarea.com) ### How much money is involved, and where is it coming from? San Jose Business Journal reported on May 15 that the project secured $71.1 million in financing. (nbcbayarea.com) Multi-Housing News, citing market data, separately reported total financing of $74.1 million for the conversion. The difference in reported totals was not immediately explained in the public summaries available online. (taylorengineers.com) The City of San Jose said in a February information memorandum that the Bank of Italy development at 12 South First Street was part of an upcoming City Council action on tax and fee waivers under the Downtown Residential Incentive Program. The city’s housing department says the program includes reductions in construction taxes, inclusionary housing fees and park fees, and was created to spur residential construction after San Jose recorded zero market-rate housing starts in 2024. (bizjournals.com) The Registry reported in March that city staff recommended about $6.1 million in tax and fee waivers for the Bank of Italy and Gateway Tower projects combined. Public search results do not break out, in the material reviewed, how much of that total was allocated specifically to Bank of Italy. (sanjoseca.gov) ### Why is San Jose offering incentives for an office conversion? San Jose expanded its downtown residential incentive program in early 2026 to include office-to-residential conversions, according to local coverage and the city’s housing department materials. The city says the program is meant to increase housing production and construction activity in a market where new market-rate starts had stalled. (news.theregistrysf.com) Propmodo reported that downtown office vacancy in San Jose had climbed to roughly 30%, citing Cushman & Wakefield. That backdrop has pushed developers and city officials to look at adaptive reuse as one way to fill older buildings that no longer compete well as offices. Mayor Matt Mahan told NBC Bay Area in April that California housing policy has too often focused too narrowly on publicly subsidized housing. (sanjoseca.gov) Gary Dillabough, chief executive of Urban Community, told the station the project is meant to bring people back into the center city. ### What comes next for the tower? NBC Bay Area reported on April 6 that residents could begin moving in within 12 to 14 months if construction stays on schedule. (propmodo.com) That timeline points to first occupancy around spring or summer 2027. Westbank and Urban Community are now moving through construction on the residential conversion, while San Jose continues to use its downtown incentive program to back projects including Bank of Italy and Gateway Tower. (nbcbayarea.com) The next public milestones are likely to come through city permit filings, council materials and leasing activity tied to the 109-unit property at 12 South First Street. (sanjoseca.gov)