SAN JOSE — The downtown San Jose site where a housing tower was once proposed but never built has been seized through a foreclosure that shows pockets of economic weakness still dot the Bay Area property market.

The property is at 27 S. First St. in San Jose, an empty building that has been taken back through a deed in lieu of foreclosure, which is a procedure for a lender to take ownership of a property in a streamlined fashion.

San Jose officials have approved a proposal to develop a 24-story, 374-unit housing tower on the parcel, which is a building that has frontages on South First Street and Lightston Alley between West Santa Clara Street and West San Fernando Street.

The project never broke ground, even though the housing tower’s developer, a group led by Alterra Worldwide and rea

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