The former Gilroy Garlic Festival building may finally be
getting a new owner after falling to the housing slump and becoming
a bank-owned property in October 2008.
The former Gilroy Garlic Festival building may finally be getting a new owner after falling to the housing slump and becoming a bank-owned property in October 2008.
Stromiga Real Estate Development, which has offices in Saratoga and Canada, entered a contract April 2 to purchase the three-story commercial and residential structure at 7600 Monterey St.
“It’s a very high-quality building, and we were able to buy it at a price where we can afford to be patient,” said Steve Benjamin, managing partner for Stromiga.
However, Benjamin would not reveal what that price was, as the building has yet to be sold.
Stromiga owns property in San Francisco, Campbell and western Canada, according to the company’s Web site.
The real estate firm has been looking at the former Garlic Festival building for about a month and sees a lot of potential for it, Benjamin said.
“We look for buildings that have some problem that we think we’re capable of solving,” he said.
The building at Monterey Road and Lewis Street has faced no shortage of problems. Pacific National Bancorp acquired the building after the Gilroy Garlic Festival Association board voted in October 2008 to stop making payments on the $8.8 million loan it took out with its partner, Pleasant Valley Development Group, to construct the building. South Valley National Bank, which is owned by Pacific National Bancorp, financed that loan.
Stromiga representatives spoke with Garlic Festival staff about the building this week, Benjamin said, and he learned about the challenges they faced.
“We know how difficult it has been to go through this process,” Benjamin said. “We think there’s a good future. It was just really, really bad timing for this building.”
The orange and beige stucco structure includes 24 condominiums on the top two floors and retail and office space on the bottom floor.
Stromiga may add some apartments to the bottom floor, Benjamin said, although there will still be office and retail space facing the street.
He predicted there would not be much demand for retail space in the short term, but he expected that would change over the long haul.
“I don’t know of demand for retail for that building – which is the best building in town in my opinion – until it’s marketed,” he said.
Still, he feels that Gilroy has lots of potential, as it is a beautiful area that sits within the Silicon Valley.
Debbie Whiteley, executive vice president of building owner Pacific Capital Bancorp, said this week that she could only comment on the matter “if and when a sale should be concluded.”
Mark Sanchez, a real estate professional and vice president of Colliers International’s Gilroy branch, stressed that the building has not yet sold. However, Stromiga seems to be “a very enthusiastic buyer at this point,” he said. Sanchez was enthusiastic to see the building under contract.
“It’s kind of the cornerstone for downtown Gilroy, and we want to see it in good hands,” Sanchez said.
Stromiga hopes the sale will be complete within the next few months.
Downtown developer and advocate Gary Walton noted that contingencies must be worked out when a building is under contract, but he hopes to see the sale go through.
“I’m anxious to see that building occupied,” he said.
