Texas-based Hines Interests has asked San Jose to consider a two-track makeover of 150 South First Street, the two-story block that faces South First, South Second, and the Paseo de San Antonio. Eleven empty ground-floor spaces totaling about 31,000 square feet would become Paseo Place. Behind those storefronts, the firm also wants to modernize a data center that sat mostly idle after older equipment went out of date. Hines paid roughly $59.6 million for the 179,800-square-foot building in 2021, its first Downtown San Jose purchase. The site once carried the Pavilion mall name, a late-1980s retail bet that never quite became the Rodeo Drive city leaders hoped for.
Outdoor dining, shade, and new lighting would land on the Paseo. New materials, signs, and a brightly lit clock tower next to the complex are meant to pull eyes toward the walkway that already links the plaza formerly known as Plaza de César Chávez, the Hammer Theatre, and San Jose State. Ownership says it will recruit restaurants and retailers with incentives rather than wait for tenants to wander in. Nearby successes on or near the same paseo, including Scott’s Seafood, Eos & Nyx, and Urban Putt, show the corridor can hold a crowd when the rooms stay open.
The data center piece would be larger and quieter. Equipment installed about 29 years ago would give way to a facility with high-density cooling and tighter emissions controls on emergency generators. Power capacity would rise from about 5 megawatts to 40. City officials have treated new, fully running data centers as a tax source, with estimates in the range of $3.4 million to $6.8 million a year in utility and property taxes for a completed project. Santa Clara County already ranks among the country’s busiest data-center markets. Hines argues the public face of the block would stay retail and pedestrian, even if the floors above and behind the glass do something else.
None of this has a green light yet. The filing, PDC26-016, seeks Early Consideration under the city’s Innovative Project Pathway Program, a route for projects that claim an unusual public benefit even when they sit awkwardly against existing zoning. Early Consideration is feedback, not approval. Council has used the same pathway on other Downtown pairings of data halls and street-level activity. Vacancy remains the everyday problem: more than 70 empty Downtown storefronts turned up in a recent count, and commercial emptiness has hovered near a quarter of the inventory.
A revived Paseo would give students, theatergoers, and office workers a reason to linger between First and Second instead of cutting through a string of dark windows. If the city can extract both a livelier walkway and a steadier tax check from the same parcel, Downtown San Jose gains something it has needed since the Pavilion era ended. The proposal still has to survive public review. For more on the filing and the city’s large-energy project list, see the City of San Jose Planning Division page for data centers and the September 11, 2026 Mercury News report.
Source: The Mercury News
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