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Michael Van Every knows he’s in a race that can’t be won. The race being building enough residential units to keep up with an insatiable demand for housing. That’s a key reason why Van Every, the president and managing partner of San Jose-based Republic Urban Properties, is a big proponent of transit-oriented developments (TOD). In the last decade, city planners in San Jose and throughout the Bay Area have paved the way for these mixed-use projects neighboring train and bus hubs to proliferate.
“You have to take key locations that are TOD and you have to keep planning, building and you never can stop, just like you’ve never stopped building in New York or San Francisco,” says Van Every. “The minute you stop city building is the minute the United States ceases to exist.” Republic has three major TOD projects in the works, two in San Jose and one in Millbrae. It’s also working on so-called “build-for-rent” projects — lower-density townhouse developments — outside Silicon Valley’s core.
Van Every, a San Jose native, is a persistent person. When he was two-and-a-half years old, he suffered burns over 60% of his body when a water heater at his grandmother’s house exploded. “I have a lot of motivation in me, from my background,” he said. “I like it when I’m faced with fight or flight because I’m going to fight.”
Van Every spoke with the Business Journal recently about his career and views on development. This interview has been edited for length and clarity.
"I’ve grown up here. I’m a third generation San Jose resident. It’s always had the potential but we never quite seem to live up to it.”
MICHAEL VAN EVERY, Republic Urban Properties
ABOUT VAN EVERY
Title: President/managing partner, Republic Urban Properties
Age: 53
Hometown: San Jose
Education: Bachelor’s degree from California State University, Fresno; journalism major with an emphasis in advertising and public relations
Career path: Started as an intern in 1990 for former San Jose Councilmember Patricia Sausedo, working on development plans in San Jose’s Evergreen neighborhood; worked for Sausedo as a housing land-use consultant after she left the City Council in 1993; ran Sausedo’s losing 1996 campaign for Santa Clara County Board of Supervisors; worked for Citation Homes, Centex and Summerhill Homes; joined Republic Urban Properties in 2006; became its managing partner and president in 2009
Go back to the beginning. How did you start at Republic Urban? I joined the company in 2006 because I was tired of building on the farmlands. We were pushing out in places like Soledad, King City to the south and then to the east in places like Stockton, building single-family homes. It just was not that fun anymore. I also saw the need to develop quality projects within major infill corridors like San Jose, and that was my calling.
So I joined Republic Urban Properties through a combination of recommendations from Barry Swenson and the Building Trades — an odd combo, but they were both (involved in) a recent(proposal) by the Valley Transportation Authority to develop eight acres in Midtown San Jose.
My mentor — the chairman of Republic, Richard Kramer — had a long and distinguished history in Washington, D.C., working with public agencies, and I was excited to work with him. Mr. Kramer has developed some of the more iconic mixed-use projects in the East, and it was my goal to do the same here in the West. When we won the VTA(project), not many development companies saw value in public-private partnerships, at least with transit agencies.
You’ve been in the development world for a while. What has made it work for you? I think most people that are in commercial real estate development have this kind of characteristic tenacity and persistence. It’s just an exercise in persistence. That’s kind of our motto here at Republic Urban Properties. “Nothing in the world takes the place of persistence” is a favorite quote of mine by former President Calvin Coolidge.
In California, persistence is required to chase these entitlements down. But more importantly, it’s needed to be able to understand the calculus to finance a project and make it happen. So I’m really proud of that, and I’m proud of the people that work here.
Republic Urban is doing several transit-oriented developments. Why are you so bullish on them? You have to play the long-game to be successful at TOD, especially if it’s a public-private project. Transit-oriented projects are necessary for our society moving forward to continue to build cities with strong infrastructure and provide the housing and other important commercial components that make the quality of life high in urban areas. It’s also a great business plan as a developer to increase value of public properties that benefit the developer and the government agency.
Public-private projects have been around for many years, especially in the East Coast in cities like New York where projects like the Chrysler Building were developed with long-term ground leases for the land owner to provide a steady cash flow. Here in the West, more and more public agencies have adopted this approach of ground leasing public property versus selling it.
Considering the communities that you build in, what are some of the easier places to develop in Silicon Valley? The city of Morgan Hill has really upped its game. We developed a beautiful 83-unitapartment building called Sunsweet near the Caltrain station. At one time, Morgan Hill was very anti-growth, but there’s been a cultural shift.
It started within the downtown but it’s been emanated by some outstanding staff people in the city and its economic development department, its city manager’s office and the planning department. They do a darn good job of processing from start to finish.
Where are some of the harder places to build? Challenging locations would be anywhere in the Peninsula. Also, frankly, the city of San Jose.
In the Peninsula cities, you really have to deal with a lot of the human resource factors. You might have a planner that starts one day and is gone the next.
In San Jose, they have had similar turnover with city staff, but compounding matters is the latest general plan, which has made a mess of housing in the city. Also, in San Jose if you don’t have experience in working with the city process, it can be excruciating and time consuming.
But positive change is on the horizon in San Jose. I’m really looking forward to the future with the mayoral administration change. Hopefully all that brings in new people to city staff and a better general plan that helps streamline housing.
I would say the mother of all processes is still San Francisco. I don’t build there — yet.
What kind of trajectory is San Jose’s development on? I think there’s all this concentration on Google, on Downtown and on Jay Paul’s project — and yeah, he’s delivering. But there’s countless other developers who are just proposing things that get written up in the Mercury News or other publications, but the projects that seem a pipe dream. I have seen their projected (financials), and they are not factual.
San Jose and Downtown is always looking for that developer “savior.” Right now, they believe it to be Google.
I’ve grown up here; I’m a third generation San Jose resident. It’s always had the potential, but we never quite seem to live up to it. We were close before the pandemic hit. That has been devastating to new office development, which is vital to core businesses in Downtown.
The only project that has ever lived up to its billing is Santana Row. It’s the best project San Jose has ever delivered in the last 100 years. The developer, Federal Realty, continues to build on what they’ve done and build across the way on Olsen (Avenue) — it’s just gorgeous. Federal is a superstar developer in San Jose.
Do you take inspiration from other Silicon Valley developers doing projects right now? Santana Row was my inspiration for Millbrae Station – one of Republic Urban’s biggest developments. The pedestrian corridor and the way I orientated the buildings, along with the mixed use, throwing a hotel in there. Federal Realty, Sobrato Companies and their South Bay projects have been a great inspiration to me and my design teams.
I’m also a big admirer of Related, the Irvine Company, Essex. All amazing companies, and I have been fortunate to be a partner of Essex on many projects within our portfolio.
The Bay Area is facing a housing shortage like no other. In what ways has the pandemic further affected the multifamily market? The multifamily market has maintained, and it’s probably poised to continue upwards.
It’s very difficult to build right now. And it’s not really because of government regulation. It’s straight up cost.
When you look at a snapshot of the Bay Area, we’re in the top three markets for rent. So how do you continue to provide that product when you have inflation, possibly in the double digits for construction? That is the biggest challenge right now.
I’m concerned about it, because we can’t continue to charge $4,000 for a studio apartment. I don’t think the market will bear that long term. I think we’ll build this product, and we’ll make a case for it. Then we could be one recession away from that apartment being vacant.
In Silicon Valley, there will continue to be demand for housing. It’s important that commercial real estate builders do a better job of understanding who their tenants are going to be and where they are building housing.
How should cities plan their long-term development projects? In San Jose, we have 10 City Council districts, and we have a lot of diversity in each of these districts, so you better make sure that you go into a district knowing what product types work and where they work best. I think that’s the biggest thing.
Everybody’s been crowded into the downtown. I feel like there’s so many projects here that say they’re going to develop, but it’s almost gotten to a point where you can’t even believe what will or won’t happen.
What we’re not doing a good job of right now when building out our city cores is really considering where do the families live?
That’s one of the reasons why Republic Urban Properties doesn’t like to be pigeonholed to one area of the city. The East Side has just as much potential as the West Side, as do the north and south neighborhoods.
Frankly, the surrounding markets, such as Morgan Hill and even places outside (Santa Clara) county, such as Hollister, are ready for more compact development.
Millennials now are aging up, and they’re moving out. They don’t necessarily want just a studio flat to one-bedroom around here. We talk a lot about the tech worker. Well, the tech worker now works a lot from home, and the tech worker now is not 25 years old anymore – they’re probably 32 to 35 years old. And the tech worker also desires having some kind of small open space, or at least adjacency to open space.
That’s where the pandemic has really reshuffled the deck with commercial real estate.
What’s your philosophy on expanding Republic Urban’s development portfolio? We want to diversify into the build-for-rent platform in tertiary markets throughout the Bay Area and make it like 40% of our business. Then we’re going to do 60% of our development in our core markets, which would be San Jose and the Peninsula.
But that’s not just all residential. I would love to build more hotel projects. I think there’s some really growing needs for smaller boutique hotels in business districts, like Willow Glen, for example. That’s our goal over the next 15 years.
How did Republic land in Willow Glen? In 2018, all the speculators in Downtown San Jose wanted to raise office rents to ridiculous levels. (We) needed to find a long-term location, and I also wanted to look outside of Downtown where we’ve been since 2006.
I chose Lincoln Avenue in the Willow Glen Business District because it’s San Jose’s best neighborhood and the best business district. Selfishly, because I have called Willow Glen my home on and off for over 25 years, I decided that building an iconic mixed-use project on 1098 Lincoln would be of mutual benefit to RUP and the Willow Glen community.
What advice would you give to people new to commercial development? I tell young people that come into the industry: Look, if you want to get rich quick, it’s not going to happen. If you want a lifelong achievement, something that you’ll love and always work on, and incrementally take care of your family, then this is your industry.
There are some people in this town that think there’s a get-rich-quick strategy. Many in Downtown San Jose, specifically in these “opportunity zones,” have visions of grandeur that they can change the world overnight. It does not work that way, and there are no shortcuts.
IN DEVELOPMENT
Michael Van Every’s Republic Urban Properties is at work on three transit-oriented developments in Silicon Valley. Combined, the three developments would bring more than 1,300 units of both market-rate and affordable housing to the region. Here’s a look at those projects:
Tamien Station
1179 Lick Ave., San Jose
In partnership with: CORE Development and the VTA
Size and location: 6.9 acres near the Tamien VTA Light Rail and Caltrain stations
Housing: 434 market-rate apartments and 135 affordable units
Other elements: 3,000 square feet of commercial retail space
Status: Approved. May begin construction in 2023 and is expected to take two years to complete.
Cost: Not available
Blossom Hill Station
Blossom Hill Road at Canoas Creek, San Jose
In partnership with: EAH Housing and the VTA
Size and location: 7.59-acre property at the light rail station
Housing: 239 market-rate apartments and 89 affordable units
Other elements: 10,775 square feet of retail and commercial space
Status: Approved. Construction not expected to begin until 2024 and could take three years to finish.
Cost: $118M (estimate)
Gateway at Millbrae Station
126 N. Rollins Road, Millbrae
In partnership with: BART
Size and location: 17-acre property just east of the BART and Caltrain stations in Millbrae
Housing: 320 market-rate apartments and 100 affordable units, 80 of which are for veterans
Other elements: 151,583 square feet of office space, 44,123 square feet of retail and restaurants, 164-room Marriott Residence Inn
Status: Construction began in early 2020 and should finish before 2023
Cost: $401M (estimate)
