San Jose State University on Thursday announced a $113 million lease-buy-back deal with a Bay Area developer to convert the south tower of the former Fairmont Hotel in downtown San Jose into a 700-bed student residence hall.

The university called the “landmark agreement” with Throckmorton Partners of Mill Valley “the Bay Area’s largest post-pandemic conversion of commercial property” for residential use.

Under the plan, a portion of the current San Jose Hilton Signia Hotel will be purchased by Throckmorton Partners for $73 million, which will lease the facility– with an option to buy after two years – to the university, pending approval by the California State University Board of Trustees.

“ The agreement will position SJSU to tap into currently underutilized, empty hotel space, and be able to deliver on hundreds of affordable housing units for undergraduate students by fall 2024.” the university said in a statement. The new residence will include 124 affordable beds for students in need.

In addition to the purchase cost of the 264-room south tower of the 805-room Hilton Signia hotel, located several blocks east of the San Jose State,  another $40 million is expected to be spent on improvements, fees, taxes and utilities, according to the university.

The project will temporarily be called “Spartan Village on the Paseo” until the completion of a formal facility-naming process, according to San Jose State.

The lease agreement will be financed from a $89 million debt relief package awarded this year by the state’s Higher Education Student Housing plan.

“The university’s ongoing efforts to further expand its footprint in downtown San José will lead to hundreds more students living within a short walking distance to campus and contributing to downtown small businesses and entertainment venues,” the university said in the statement. “Additional students living downtown underscores the university’s commitment to housing more of its students and also its continued investment in downtown San José’s economic vitality and success.”

Ultimately, the university aims to leverage new state housing-specific funding secured earlier this year to deliver a cumulative total of 517 affordable student beds across its entire housing stock in the coming years.

The project aligns with a key goal of the university’s new Campus Master Plan to have 20% of the full-time student population living on or immediately near campus.

“Our students are the heart of all that we do at San José State University,” said San Jose State President Dr. Cynthia Teniente-Matson. “This new housing option will expand our campus footprint and add student vibrancy to the downtown corridor. The SJSU campus influences industry-defining research and learning, and at the same time integrates our university community with small businesses, medium-sized companies and even global headquarters of major corporations, creating invaluable opportunities to unlock students’ potential and potentially jump-start their careers.”

Renovation of the hotel is scheduled to begin immediately to deliver new student housing by August 2024.

Plans include a major renovation of the lobby and second-floor mezzanine spaces into a “student-centric” environment to support social activities and programs.

Amenities will consist of an expansive dining area and a community kitchen, a fitness center, a games room, co-learning spaces and a study lounge in the “sky bridge.”

Residential staff will develop and offer social activities and programming and provide assistance for students.

In addition to the renovations, less intensive modifications will be made to floors three to 14 to better align rooms with a student residential layout including updating existing building systems and providing new furnishings.

“The university hopes it will aid in the city’s ongoing transformation efforts of retail space, bringing intellectual, and cultural change to downtown businesses, restaurants and cultural institutions,” the university said in a statement.

Throckmorton Partners said in a statement: “We are thrilled to announce our partnership with San José State University to transform the prestigious five-star Signa Hotel into a state-of-the-art student housing facility. This project is not just about providing housing; it’s about creating a vibrant, supportive community for the university’s students.”

“We are beyond excited to partner with Throckmorton Partners on this important University project,” said Charlie Faas, San Jose State vice president for administration and finance. “The Throckmorton team worked tirelessly over the past nine months to forge a partnership with the university and CSU and were exceptional in their attention to detail and focused efforts to meet the needs of the University and our students.”

Admitted students for the 2024-25 academic year will begin receiving information about their housing options, including Spartan Village on the Paseo, in the coming months. Details on the housing application process can be found at www.sjsu.edu/housing.

“We’re offering a brand new and unique opportunity to open up housing for our students in the fastest turnaround possible. New student housing options are what our Spartans deserve,” said Patrick Day, vice president for student affairs. “Bringing more of our students closer to campus allows them to focus on their success, expand their professional networks, and tap into the unique opportunities that proximity to the action of Silicon Valley has to offer.”

More details and renderings can be found at go.sjsu.edu/newhousing.