The Empty Corner In Old Town Wasn't Missing Tenants. It Was Missing One Big Enough.

If you've walked past University and Elm anytime in the last few years, you've watched the same storefront do nothing. The glass has been dark since Steamer's Grillhouse closed after 45 years and Gap cleared out of the space next door. Planning Commissioner Steve Raspe has pointed out that the building has carried vacancies since 2023, which puts the empty stretch at roughly three years and counting as of this fall. Old Town doesn't usually let a corner sit that long. So why did this one?

The answer isn't a lack of interest. It's math. And the tenant who finally solved it isn't a stranger to town.

Two Storefronts, One Empty Corner

Steamer's occupied roughly 6,400 square feet. Gap took up about 8,641 more. Combined, that's a single vacant footprint close to 16,000 square feet, sitting on a 4.18-acre parcel that spans both sides of University Avenue known as the Old Town Shopping Center. Most concepts that thrive in a small downtown, a boutique, a wine bar, a second-generation family restaurant, don't need anywhere close to that much room. The corner wasn't overlooked. It was oversized for almost everyone who might have wanted it.

What it needed was a tenant willing to treat two former leases as one continuous space. RH is that tenant, and the town's own project filings describe exactly that: a combined design gallery and restaurant program built to occupy both former footprints at once, rather than subdividing the corner back into smaller, more conventional storefronts.

The Company You've Already Been Driving Past For Fifteen Years

Here's the part that gets lost when the story gets told as "luxury retailer discovers Los Gatos." RH isn't discovering anything. It has operated a gallery at 26 North Santa Cruz Avenue, a few blocks away, for fifteen years. This isn't a new brand testing the market. It's an existing tenant doubling its footprint in the same downtown it already knows.

At the August 2025 Planning Commission hearing, RH's leadership went further, floating the idea of converting that original Santa Cruz Avenue store into an RH Outdoor location once the University Avenue project opens. If that happens, RH would run two galleries within walking distance of each other, alongside the new restaurant. That's not a company hedging its bet on a market it isn't sure about. It's a company that has already made up its mind.

What's Actually Going Inside

The plans on file describe three functions under one roof:

• A full-service restaurant at the center of the building, covered by a pyramidal skylight, with barrel-vaulted hallways framing either side of the dining space
• A design gallery displaying furniture and décor as complete living, bath, and bedroom sets rather than a typical showroom floor
• An interior design studio toward the back of the space, where staff can work directly with customers on their own projects

Proposed hours run 10 a.m. to 10 p.m. Monday through Saturday, with last seating at 9 p.m., and 10 a.m. to 9 p.m. on Sunday. For a downtown where, as one Chamber-backed hearing letter put it, people usually have to leave Los Gatos for an evening out, that's a meaningful stretch of the day when there's now somewhere to actually be.

RH Chairman and CEO Gary Friedman put it plainly at the hearing where the project first came before the Planning Commission: "We just would love to be here and we will do something, I think, that will make the community proud."

The Fight Was Never About The Restaurant

Nobody at the Planning Commission hearing objected to a restaurant and furniture gallery moving into a long-vacant corner. Not a single resident spoke against the concept itself. The disagreement that did surface was narrower, and more interesting: what the building should look like once RH was done with it.

The existing structure reads as three separate buildings stitched together. RH's design would unify that into one continuous facade with a Mediterranean-inspired look. The Historic Preservation Committee reviewed the change in March 2025 and declined to support it, worried about what unifying the facade would do to the corner's character inside a designated historic district. The Planning Commission took a different view five months later, voting 4-1 to recommend the facade change anyway. Commissioner Susan Burnett cast the dissenting vote, arguing the town was at what she called a crossroads and asking her colleagues directly where in Old Town the small-town feeling was still supposed to live if not on corners like this one. Longtime resident and Los Gatan columnist Alan Feinberg raised a similar concern, saying he supported what RH would bring to downtown but worried the unified design would erase the individuality of the current buildings.

The Town Council heard the same tension on October 7, 2025, and approved the project unanimously anyway. The one remaining fight, over whether to require a plant-based menu item, also came down on the side of leaving it to RH: Vice Mayor Rob Moore raised the idea, Councilmember Mary Badame pushed back, and the council approved the project without any menu condition attached.

So the real disagreement wasn't about whether Los Gatos wanted this. It was about how much of the old building's bones the town was willing to trade for it.

What Changes For Anyone Walking Old Town

Practically, the shift is about what finally fills a corner that's carried vacancies since 2023. Commissioner Steve Raspe framed it as a foot traffic question during the hearing, arguing the project would create a genuine destination for eating and shopping and, by extension, pull more people past the businesses already there. Muna Ahmed, who works across the street at Massei Construction, made a similar point in blunter terms when the plan was first announced, noting her own team used to bring clients to Steamer's before it closed and that the block has always drawn a crowd. Chamber CEO Jennifer Lin has described the moment as part of a broader culinary renaissance downtown, one where a flagship-scale project like this adds credibility rather than just square footage.

No public timeline has been announced for when the doors actually open. What has been settled, through three separate votes across three different town bodies, is what's coming and roughly what it will look like once it's finished. For a corner that's sat empty since 2023, that's the actual news.

If you're weighing what a stretch of Old Town like this means for property values nearby, or thinking through timing on a home near downtown, Jacqueline Renovato has been tracking these shifts corner by corner. Let's Begin.