Official said fireworks caught a tree and part of the Grand Century Shopping Mall on fire.
Some said these fireworks were illegal.
The mall is very popular and was very crowded when the fire broke out.
Security officers did not initially call police because they thought they could contain the fireworks, which turned out not to be the case.
At the mall Tuesday, shoppers were treated to a festive performance, but to get inside they first had to walk past damage likely caused by the fireworks.
"Dangerous, scary, and this is why, I'm glad no one got hurt," Belmont resident Gail Andres said.
Video captured by an ABC7 News viewer showed fireworks going off as a large cypress tree went up in flames.
Mall management told ABC7 News the fireworks were not coordinated by Lunar New Year festival organizers, but rather rogue visitors who decided to take matters into their own hands.
Police officers working an off-duty assignment close by were focused on crowd and traffic control at the time of the fire.
"This looks horrible, it just really looks bad," Andes said.
These sorts of Lunar New Year displays aren't anything new. San Jose police received 59 calls city-wide related to fireworks Monday, but no one was cited, nor was anyone called to the mall.
However, in light of Monday night's illegal activity, some said more needs to be done to put an end to it all. "I don't know, I love fireworks when they're done right, but this is dangerous, especially with all the children and crowds, and just all the horror stories," Andes said.
The property's maintenance team has been cleaning up the mess.
Visitors said the holiday isn't just about fireworks. "It's okay if there are no fireworks, I can walk around and eat, and like have fun with the friends," San Jose resident Hung Nguyen said.
A San Jose fire spokesman said Monday night's celebration did not have a fire inspector on the scene, which is required to obtain a permit for a fireworks display. Police say they were not informed of any citations being handed out for illegal fireworks.
The mall does have a sign on its entrance saying fireworks are prohibited, but these Lunar New year celebrations have been going on here for years.
Thanks to San Jose Fire Department for putting out a blaze at Grand Century Mall as community celebrated the Lunar New Year. Crisis averted!— Ash Kalra (@Ash_Kalra) February 9, 2016
San Jose PD says 59 fireworks calls yesterday.— Matt Keller (@MattKellerABC7) February 9, 2016
0 at Grand Century Mall where fire started at Lunar New Year event. pic.twitter.com/tUHpZdTtWD