Del Monte Sells Idle Cannery Property to Homebuilder

SAN JOSE, CA-Del Monte Corp. has sold a 12.5-acre one-time cannery property here to KB Homes, which plans to develop the property with as many as 500 attached homes. The property sold for $24 million, or $44 per sf, according to local real estate sources.

The property, known as Del Monte Plant #3, is located north of Auzerais Avenue between Sunol Street and Los Gatos Creek. The plant closed its doors in December 1999 after 82 years of fruit processing and canning.

KB Homes has entitled the land for 40 units per acre. As part of the redevelopment agreement, KB Home agreed to retain a water tower on the property and preserve portions of the old cannery building and its materials. Some of the materials will be re-used in the nearby park and transit station. The intent of the cosmetic work is to give the park and station a look and feel of an old cannery.

The seller’s brokers, Greg Davies and Chip Macdonald of CPS/Corfac International, declined to confirm the acquisition price but did say KB Home was not the only interested party in the property. In addition to other bidders on the property, the City of San Jose expressed interest in buying the property for a baseball stadium, according to the brokers. All told, the disposition of the property was 2.5 years in the making, they said.

The residential development fits with surrounding developments. In October 2000, the Castle Group of San Mateo, CA acquired Del Monte Plant # 51 on nearby land and broke ground on a residential development. The community known as Cahill Park opened in March 2004. Of the 160 homes built on the site located on Bush Street off of The Alameda, 36 remain for sale.