What's New in Downtown Los Gatos This Year

Walk past 31 University Avenue in Old Town today and the block that used to be Steamer's Grillhouse is still dark, waiting on a build-out the town approved almost a year ago. For 45 years, that address belonged to Steamer's, the seafood restaurant three siblings named Paul, Mark, and Linda Matulich opened in August 1979. It closed in December 2024. The Gap next door had already gone dark. For most of the past year and a half, that stretch of University Avenue has been the kind of empty storefront every Los Gatos resident has an opinion about.

That opinion is about to matter less, because the town council already settled the question. What replaces Steamer's, and what replaced the grocery store a few blocks away, and what the town just changed about drinking downtown, all point in the same direction: Los Gatos spent the last twelve months trading the businesses that built its reputation for the ones it thinks will fund its next chapter. That is not decline. It is a deliberate swap, and there is a paper trail.

The Restaurant That Took Steamer's Place Came With a Council Debate About Its Menu

RH, the design and hospitality company formerly known as Restoration Hardware, will fill the vacant 15,957-square-foot space that once held both Steamer's and Gap. The Los Gatos Planning Commission recommended a conditional use permit for the project in September 2025, and the Town Council gave it final, unanimous approval on October 7. RH's plan folds a fine-dining restaurant into its furniture gallery model, the same combination the Corte Madera-based company has built in other markets. According to a letter of support from the Los Gatos Chamber of Commerce, an RH restaurant brings in an average of more than $10 million a year in revenue, a figure the Chamber cited explicitly to make the case for sales tax gains.

The approval process got more granular than most zoning votes. Then-Vice Mayor Rob Moore pushed to condition the project on including at least one plant-based menu item. Councilmember Mary Badame pushed back, and the council approved the project without any menu requirement attached. Commissioners also voted 4-1 to let RH merge what currently looks like three separate buildings into one continuous facade, a change one commissioner opposed specifically to preserve some of the block's existing character. The new restaurant will actually be about 4,000 square feet smaller than Steamer's was.

No opening date has been announced yet. When it lands, it will be the most visible marker of Old Town's new tenant mix: not a replacement restaurant, but a national brand explicitly courted for tax revenue, approved after a debate about whether the town could dictate what shows up on the plate.

The Grocery Store Every Local Grew Up With Moved a Few Blocks and Doubled in Size

The other half of this story sits about a mile down Los Gatos Boulevard, on a corner that sat empty for over a decade. A Chevrolet dealership operated there until 2008, when it closed and the lot went vacant. Sand Hill Property Company, the same firm building Cupertino's largest housing project at the former Vallco Mall site, bought the land in 2021 for $15.1 million and secured development approval from the town in 2023.

On April 15, 2026, that corner reopened as a new Whole Foods Market at 15650 Los Gatos Boulevard, at the intersection with Los Gatos-Almaden Road. Reports on the exact square footage differ slightly, with the company's own release putting it at 43,130 square feet and local coverage citing just over 40,000, but every account agrees on the shape of the change: it is roughly double the size of the 22,000-square-foot store it replaced, which had served the neighborhood since 1994. A Tesla sales and service center opened on the same site in November 2025.

The old Whole Foods location, half a mile to a few blocks south depending on which account you read, closed when the new store opened. Its longtime neighbor, a Rite Aid, is being converted into a Club Fitness. No tenant has been announced yet for the old grocery space itself.

Here is what changed hands on that stretch of the boulevard and around Old Town over roughly the same twelve months:

Mayor Rob Moore, who lives near the new store, told a local reporter that people in his neighborhood were genuinely excited about it. That is a reasonable reaction to a bigger, brighter grocery store. It is also worth noticing that the excitement is arriving alongside a national EV brand and a formula-retail restaurant chain, on a corridor the town itself has described as ready for more foot traffic and more sales tax.

Downtown Started Letting You Walk Around With a Cocktail

The town made one more structural change this year that is easy to miss unless you were already looking for it. On February 17, 2026, the Town Council adopted Ordinance 2382, creating an Entertainment Zone inside the C-2 downtown district. Once a business is inside the activated zone and has notified the state Department of Alcoholic Beverage Control of its participation, patrons can buy a drink at one licensed spot and walk it to another public area within the zone's boundaries, rather than finishing it before they leave.

It is a small rule change with an obvious purpose: keep people moving between restaurants and shops downtown instead of parking at one table for the night. Paired with a new luxury restaurant landing where a 45-year institution used to be, and a much larger grocery anchor a mile away, the ordinance reads less like a standalone nightlife perk and more like another piece of the same plan, one designed to keep evening foot traffic circulating through the same blocks the town has spent the past year reworking.

The Rest of What Changed This Year

Not everything new in town ties back to Old Town's tenant swap. A few other updates are worth knowing if you live here:

• Rob Moore became the youngest mayor in Los Gatos history. Councilmembers voted unanimously to make him mayor on December 9, 2025, when he was 27. He is the only sitting councilmember under 60.
• Shannon Road is closed for repair through late October. Construction began April 20, 2026, to fix a roadway failure and build a retaining wall. The road is fully closed between Santa Rosa Drive and Diduca Way, with detours in place, and the town expects the work done by October 30, weather permitting.
• La Rinconada Sports Court was closed for repairs from June 29 through early August. It should be back open now if you haven't checked in a few weeks.
• A new mobile grocery stops at the library twice a month. The Park-It Market, a partnership between the town and West Valley Community Services, runs every second and fourth Thursday from 10 to 11:15 a.m. at the Los Gatos Library.
• National Night Out took over Town Plaza Park on August 4, with the Los Gatos-Monte Sereno Police Department hosting cornhole, a dunk tank, and a blow-up batting cage from 5 to 7 p.m.
• The town launched MyLosGatos311, an app for reporting issues and requesting services without a phone call.

What This Actually Adds Up To

None of these changes happened by accident, and none of them happened in isolation. A council that argues over a restaurant's menu is not a council that treats redevelopment casually. A town that passes a to-go cocktail ordinance the same year it lands a design-and-dining brand on its most storied corner is thinking about downtown as a single system, not a collection of separate storefronts. Los Gatos did not lose Steamer's and its original Whole Foods to neglect. It swapped both for tenants the town explicitly wanted, and it has the meeting minutes to prove it.

If you have watched this stretch of town shift over the past year and you're weighing what it means for your own next move here, whether that's buying, selling, or just understanding what your block is becoming, Christopher Renois has been tracking these changes as they happen. Let's Connect.