Major downtown San Jose hotel undergoes major overhaul ahead of reopening

SAN JOSE — A major hotel in downtown San Jose is undergoing a major renovation ahead of an upcoming reopening, a revival poised to be a welcome counterpoint to the hotel’s bankruptcy and closure.

Signia by Hilton San Jose, known for decades as Fairmont San Jose, is set to reopen in late March, ending a coronavirus-related shutdown that began nearly a year ago.

“The hotel is going to be completely repositioned,” said Sam Hirbod, general manager of the group that owns the Signia by Hilton San Jose.

Operating for more than 30 years as Fairmont San Jose, the 805-room hotel filed for bankruptcy and closed in March 2021. A reopening is now in sight for the iconic two-skyscraper hotel.

“The North Tower is undergoing a complete renovation,” Hirbod said. “It will be a renovation of every room in every way.”

In total, the renovation is expected to cost around $45 million. That includes $10 million that the hotel owners spent in early 2021 on a complete overhaul of the lobby and common areas downstairs. The lobby is located in the North Tower.

The North Tower at Signia by Hilton San Jose will gradually open, floor by floor, as new rooms are renovated.

“Every piece is going to be completely new,” Hirbod said. “All bathrooms are being renovated, all furniture and fittings will be upgraded and replaced.”

These are far from the only improvements to the iconic hotel, according to the hotel owner.

“We completely renovated the fitness center and almost tripled the size of the fitness space,” Hirbod said. “We completely upgraded the pool deck, including the pool and all the cabanas around the pool.”

In the lounge, the hotel aims for a fusion concept which is a combination of Japanese and Peruvian cuisine.

The hotel brought in Chef Hans, a San Francisco-based Dutch chef who spent 15 years

“We hired Chef Hans for all of our hotel offerings, including banquets and food concepts,” Hirbod said. “He prepared food for artists and royalty. He has cooked for major events and the best hotels around the world. We recruited Chef Hans to take the food concepts of our lounge and banquets to a whole new contemporary level.

Chef Hans has 15 years of experience as a chef working in kitchens in Holland, Australia and South America, according to his website.

“We are also looking at new spa concepts for the hotel,” Hirbod said.

Hirbod also praised the approach taken by world-renowned hotel company Hilton in managing and operating the Signia Hotel.

“Hilton has made an incredible commitment to this hotel,” Hirbod said.

Following the bankruptcy, Hirbod was able to terminate its management contract with Accor Management US to pave the way for Signia Hilton to become the hotel’s new manager and operator.

During the bankruptcy proceedings, the hotel owner and the Accor group reached an agreement which removed the main obstacle to a financial overhaul of the hotel.

Signia Hilton has agreed to provide a $15 million payment to strengthen hotel assets and facilities. In addition, JPMorgan Chase grants a loan of 25 million dollars to strengthen the operations of the hotel.

“Hilton, as a hotel operator, is already a breath of fresh air,” Hirbod said.

The Hilton brand could be an improvement over Accor Management Group, which operates the Fairmont brand, according to Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging market.

“Signia is affiliated with Hilton, which is ranked the number one hotel brand in the world,” Reay said. “The number of hotels worldwide under the Hilton banner is very valuable for this type of asset.”

Still, challenges loom for the hotel, even with the Signia by Hilton brand.

“The underlying issue, as with all downtown convention center hotels, is how long it will be before these conventions return,” Reay said. “Until you get this business back, it will be a struggle.”

Separately, lender CLNC Fair San Jose Finance, which is affiliated with BrightSpire Capital, provided a $185 million loan to the hotel, according to documents filed with the Santa Clara County Recorder’s Office. BrightSpire Capital is the primary lender to the hotel, which is located at 170 S. Market St. in downtown San Jose.

“This hotel has become a strategic investment for Hilton as well as for us, as for our lender,” Hirbod said. The operator, owner and lender have all made very strategic bets on this hotel.

Hirbod thinks the hotel could help boost economic activity in downtown San Jose.

“We want to provide an atmosphere that the traveler and the guest are really looking for and are used to getting,” Hirbod said. “We want to bring new culinary energy to downtown San Jose. We’re going to do everything about it.