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Silicon Sage Founder Brings High-Tech Savvy to Construction Business

Silicon Sage Founder Brings High-Tech Savvy to Construction Business

For 50 years Santa Clara has tried to recapture the downtown that was bulldozed for “urban renewal” in 1963. Proposals have come and gone without results. Now, Santa Clara-based Silicon Sage Builders is advancing a project to recreate a piece of old downtown: Downtown Gateway.

The natural question is, “Why would this succeed where so many have failed?” One answer is Silicon Sage founder and CEO, Sanjeev Acharaya. When others say “can’t,” Acharaya asks “how.”

A former telecommunications engineer, Acharaya isn’t so much a risk-taker as a risk manager. So he’s not proposing a wholesale downtown revitalization. He’s looking at one block, where Neto’s Market and Restaurant once was.

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Acharaya grew up in Bijapur, India, a 1,000 year-old city known for its spectacular historical monuments and buildings. “I grew up surrounded by history,” Acharaya says. That experience informs the attention to historic detail poured into Downtown Gateway’s design.

Acharaya’s first real estate venture was in 2001. He didn’t know construction or architecture, but he knew project management. “In California, the risk [in real estate] was very great,” he says. To control that, he bought “fixer-uppers” and renovated them; increasing their intrinsic value regardless of market fluctuations.

Next was a small experiment in urban infill – buying an older house on a sizable lot, and replacing it with two houses. “In 2008 the market bubble burst,” Acharaya says. Banks weren’t lending and he couldn’t get a construction loan.

Here’s where Acharaya’s experience in the tech world began paying off. Instead of conventional bank loans, in 2010 he started approaching venture capital investors. His business plan persuaded initial investors to invest $400,000.

He also applied the tech world’s drive for constant improvement to the project. “Technology is always moving forward,” he says. “The construction industry has been doing things the same way for 50 years.”

He managed the project during lunch breaks and did much of the administrative work himself. With an investor who was an experienced builder, Acharaya taught himself every aspect of the business. His formula was – and remains – tightly integrating management, design, construction and sales to maximize efficiency and minimize costs. No detail is too small to but put under the microscope.

That’s not to say there weren’t challenges. But where conventional approaches would find roadblocks, Acharaya sought detours. For example, steel beams from Bay Area companies cost $15,000, but a Salinas steel fabricator’s price was $4,000. But, Bay Area crane companies (to move the beams) exclusively contracted with local suppliers. So Acharaya finally drove to Sunol to rent a crane.

The challenges kept coming. The second house wasn’t selling. Not because of a stagnant market or tight-fisted lenders, but because a neighbor’s deteriorating roof was driving buyers away. Instead of focusing on his problem, Acharaya focused on the neighbor’s. “I went to him and said, ‘I’ll replace your roof for free.’ The roofer came on Monday. I sold the house on Tuesday.”

Acharaya’s out-of-the-box approach paid off. The 18-month project was built in six months, and sold in three. Investors encouraged Acharaya to quit his day job and run the construction business full-time.

Since then, Silicon Sage’s story is one of gradual scaling up, with continued focus on urban infill and family-oriented residential development. “We identify opportunities in under-utilized properties, and see opportunity where others don’t,” Acharaya says. Although he can’t personally supervise every detail, he still does the vital job of integrating design, construction and sales.

Community and relationship-building is a key business strategy. “My approach to cities is that rules are positive, not hurdles,” he says. “They’re protecting my interest also. If you understand the reasons, you can find win-win solutions.”

It all comes together in Downtown Gateway. “The challenge made me take it on,” says Acharaya. “It’s an opportunity to make something happen, to help kick-start something for the community.”

But while residential neighborhoods grew up around the original downtown, the new Downtown Gateway will go up with a neighborhood already in place – one that hasn’t seen a four-story building in 50 years, and where property is 40 times what it cost in 1960.

The first challenge was developing a design that “penciled out” financially, while harmonizing with the neighborhood. Responding to neighbors’ input, an initial plan for 60 residences above the stores dropped to 40 units, with a set back fourth story not visible from residential streets.

“We spent over a year refining the architecture,” says Acharaya. “We designed the back of the development first, because neighbors were that important.” The Wilson family, owners of the now-closed bakery that was a Santa Clara fixture for generations, “had a lot of good pictures, and helped us identify architectural elements that were there before.” These details became integral to the design.

“We talked to people about what they missed from downtown,” he continues. During those conversations, Acharaya sensed how much “bringing back Wilson’s Bakery was something the community wanted.”

Through conversations with the Wilsons, Acharaya also learned that the family would consider bringing back the bakery, but needed support. So, together, they’re working on a deal that could re-open the business.

Although it’s still a work in progress, “Silicon Sage’s project represented a willingness by a private developer to pursue what we’re trying to do [downtown] and build a public place,” says Santa Clara Planning Director Kevin Riley. “We’ve tried to do it with for years without success. To make these things happen you have to have the residential [development] to attract the commercial. We support what he’s doing…a market approach that can work.”

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