Borelli Investment Co. Leads Team Effort to Keep
Approximately 175 Jobs in San Jose
Business and government cooperation results in clean approval for the sale of a warehouse used for textile rentals and commercial laundry services in North San Jose industrial park area.
San Jose, Calif., July 11, 2006 — The owner of a 53,760 square foot warehouse on Junction Avenue in San Jose was ready to move. Part of a national company that specializes in uniforms and other branded identity apparel programs and services, managers of the local facility felt the time was right to relocate its operations to another building in San Jose.
Brokers from Borelli Investment Company quickly identified a potential buyer—Alsco. Alsco is a global leader in a similar line of business, with service centers in more than 120 locations and ten countries worldwide. Every day, the privately owned company picks up, cleans and delivers millions of flat linens, uniforms, chef’s outfits, cleanroom garments, dust control items, and more. Equipped with a Class One clean room—and located near Highways 880, 101, and 680, as well as Mineta San Jose International Airport—the building was a perfect location for Alsco’s proposed San Jose service center.
The challenge was the transaction needed to close quickly. And posing a major obstacle was the fact that the City of San Jose had rezoned the area around the warehouse for industrial park uses. This made the textile rentals and commercial laundry services performed in the warehouse a nonconforming use under the city’s code.
“Obviously, the existing business could continue to provide its services after the rezoning, as long as it occupied the facility,” explained Tom Zolezzi, one of two brokers from Borelli Investment Company who worked on the transaction. “But to facilitate the sale to Alsco, we needed to get a ruling from City of San Jose Planning Department that because Alsco’s operations would be nearly identical to the selling party’s, this was a legal, nonconforming use.”
Dealing with the Spin Cycle
At first, the challenges appeared to be difficult, with much uncertainty spinning around the sale. Business timetables for both Alsco and the seller required a short contingency period and quick close. If that did not occur, both businesses would be forced to seek alternate sites outside of San Jose, costing the city the 75 jobs at the present facility, plus 75 to 100 jobs at the new San Jose facility the seller planned to occupy.
The initial reading of the zoning ordinance from the City of San Jose Planning Department caused timing concerns—with the department requesting 30 to 45 days or more to review the application before issuing a decision that might or might not allow the sale to proceed.
But Tom Zolezzi and Chris Anderson of Borelli Investment Company—along with Gerry DeYoung from planning and engineering consultant Ruth and Going—worked closely over a very short timeframe with the staffs of both the City of San Jose Redevelopment Agency and the San Jose Planning Department, and a solution was found.
“With everyone on the same page, we were able to address the San Jose Planning Department’s concerns and prove that Alsco’s business represented a legal, nonconforming use,” said Zolezzi. “Contingencies were removed, and escrow proceeded, with the transaction closing on May 19th. We negotiated a good price for Alsco, and met both companies needs to move in a timely manner.”
The transaction involved not only the Junction Avenue warehouse with its nine dock doors, two grade-level doors, clean room, and large parking and truck area—but also 5.32 acres of prime land in North San Jose, perfect for future expansion, if needed. Selling price was approximately $5 million.
“The city’s vision and cooperative efforts accelerated the process and ensured we could meet Alsco’s timetable,” Zolezzi remarked. “This truly saved the 150 to 175 jobs that would have gone elsewhere, making it a clean win for the City of San Jose, as well as the buyer and seller.”
View Alsco Corporate website
Having celebrated its 50th anniversary last year, Borelli Investment Company is one of the oldest commercial real estate firms in the Santa Clara Valley. The company provides a full range of commercial real estate services-from development and construction management to land sales and consulting for sales and leasing. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or visiting www.borell-inv.com.
Contact: Ralph Borelli, CEO Borelli Investment Company 1770 Technology Dr. San Jose, CA 95110 Ph: 408.453.4700 Fax: 408.453.4636 E-mail: email@example.com