It's more likely the New Year will bring the end to an institution that started in 1956 when San Jose was still called the Valley of Heart's Delight. As the city and environs transitioned into Silicon Valley, so did Lou's Village, growing from its original 6,000 square feet to its present 28,000 square feet.

While still very much in the early stages, owners Tom and Tim Muller confirm they have entered into a preliminary agreement with Shea Properties to sell the 5 acres their restaurant sits on at 1465 W. San Carlos St. for development.

"It's a big decision for my brother and me, one we do not take lightly. We've talked for months and months," says Tim Muller, a longtime Willow Glen resident.

"Tommy's going to be 59, I'm 54 and this is a very physical job. You work lots of weekends and nights. I've been doing this all my life and the body starts wearing out a little bit. Your feet start hurting; your back starts hurting more," Tim says.

Though the restaurant has been family owned and operated since the beginning, Muller says the next generation doesn't want to continue.

"If my kids or my brother's kids were going to come into the business, I'd step back and train them," he says.

"If this goes through, and it's not guaranteed, we'll be here all through '05. We're standing by our commitments. We'll give our groups plenty of notice for next year's plans," he says.

Pat Sausedo, owner of Sausedo Company Consulting and a former San Jose City councilwoman, has been hired by Shea Properties for community outreach and to facilitate the necessary zoning changes and city permits.

While everything is still in the preliminary stages and specific plans won't be formulated until after Sausedo has gotten input from surrounding neighborhood and business associations, she says Shea Development will likely build between 98 and 102 townhomes.

"They are talking about $550,000 to $650,000 prices, but it's very preliminary and tentative at this point," Sausedo says.

Square footage and the number of bedrooms are still under discussion, she adds.

The first part of the process would be to rezone the property from existing commercial to planned development for multi-family use.

Under current city guidelines, that zoning allows for 50 to 60 units per acre. Sausedo points out that Shea is looking at fewer than 20 units per acre for the Lou's Village site, a significant difference.

Shea was the developer for Silver Creek and has been known in the past for its large, single-family residential developments. In recent years the company has been moving into "smart growth" housing, Sausedo says.

"Shea will bring a quality, upscale design and living environment," Sausedo says. "[They are] one of the best developers and they will work with the community to bring in a quality product to the area."

Muller says the transition is "not going to be easy" for him or his brother.

Lou's Village started with the partnership of Lou Santoro, the Mullers' grandfather, and Paul Polizzi, both former firemen who decided to open a seafood restaurant.

From the beginning, Lou and Alvina Santoro's daughter, Gloria, and her husband, Frank Muller, worked alongside them.

Polizzi left in 1951 and the Santoros and Mullers became partners.

Lou Santoro died in 1967 and Alvina continued to supervise the kitchen until her death in 1978. Frank Muller died in 1992 and Gloria in 1997, leaving their sons to operate the restaurant.

When Tim and Tom Muller were young boys, Lou's Village was known as much for its entertainment as its seafood.

The walls of Lou's Village are still covered with photographs from those days and the entertainers who performed and visited, from Lenny Bruce to Lucille Ball.

"A gentleman came in awhile ago and asked to see the photo of Joaquin Garay," Muller says. He pointed to the photo of the singer who owned the Copacabana Nightclub in San Francisco during World War II.

"He said, 'I'm his son. I heard my dad performed at Lou's Village and I wanted to see it,' " Muller says.

"We had a daughter of one of the Ink Spots come by. From time to time these people come in.

"That's the sad part of this story. I'm going to have to find somewhere to store the photographs, the artifacts and pots and pans."

Muller says that while Lou's Village will close on W. San Carlos, it may eventually reopen elsewhere.

"I'm going to maintain my liquor license, all my artifacts and enough equipment to open a similar, smaller establishment," he says.

"It would have to be a grade-A location; restaurants are successful in high traffic areas. If you opened a new restaurant, you wouldn't pick the middle of San Carlos Street."

One thing that Muller doesn't plan to put in storage is the mirrored shark that sits in front of Lou's Village.

As an active member of the W. San Carlos Street Neighborhood Business Association, Muller helped sponsor artist Marilyn Pratt Lebherz in the SharkByte Art project in 2001.

Lebherz' creation was "Mirror Ball Shark" and it sat on display until the auction in March 2002.

Muller bought the shark and brought it back to the restaurant.

"We've got to give him a home," Muller says. "I'm going to propose that one of the businesses give him a home; I'd like to get some of my money back.

"I'm going to talk to O.C. McDonald; he was bidding on it and I outbid him."