SAN JOSE — A brand new battleground has emerged within the struggle to manage a former Greyhound bus terminal as the positioning for a big housing challenge in downtown San Jose that has but to start.
A lender managed by actual property executives William Wang and Chris Jiashu Xu is making an attempt to grab the property at 60 and 70 South Almaden Ave. via a foreclosures of a delinquent $19.5 million mortgage.
Greater than 700 properties have been proposed for a double-tower housing challenge on the location.
In July, the event website’s proprietor, an affiliate of China-based actual property agency Z&L Properties, filed for chapter in a quest to reorganize its funds. The chapter has delayed foreclosures efforts, which enabled Z&L to cling to possession of the positioning.
On Oct. 2, a federal choose issued an order that might have successfully terminated the chapter case and allowed the lending group to proceed with the foreclosures and take management of the property, chapter court docket data present.
The identical day, the Z&L Properties affiliate filed a lawsuit in Santa Clara County Superior Court docket to dam the foreclosures. The affiliate’s allegations included wrongful foreclosures, unfair enterprise practices and different claims, in keeping with the lawsuit.
A couple of 12 months in the past, the lending group provided the Z&L affiliate a pathway to resume financing for the property, in keeping with the lawsuit.
However the lender’s proposal for a exercise and renewal of a financing bundle consisted primarily of a mortgage with a ten% rate of interest, which was greater than the prevailing charge on the delinquent mortgage of about 8%, the Santa Clara County lawsuit states.
“The October 2024 renewal was not a real workout,” the Z&L affiliate said in a court docket submitting. “It was a foreclosure trap.”
Metropolis officers have already permitted plans for Z&L to develop about 700 housing items on the previous Greyhound website. Z&L’s affiliate by no means broke floor on the challenge.
The delays have been lengthy sufficient that the permits for the positioning have expired, which might oblige a developer to begin the planning course of over from scratch.
The Z&L affiliate and the lending group have each said in court docket filings that they’ve new plans to develop housing on the property.
Whatever the end result of the court docket battles, housing shouldn’t be going to sprout on the property any time quickly, mentioned Bob Staedler, principal government with Silicon Valley Synergy, a land-use consultancy.
“It could take years for this property to be developed,” Staedler mentioned. “The developer still has to design a project that pencils out financially and meets the current demand for housing. They will have to get it financed and complete construction drawings. They have to get the city’s approval.”
The Z&L affiliate can be looking for a restraining order to halt the foreclosures till a choose or jury points a choice on the matter.
Z&L Properties and its associates have produced a checkered enterprise and actual property historical past in San Jose.
Over a interval of a number of years, complaints have arisen in regards to the blighted state of a Z&L-owned historic church at 43 East St. James St. in downtown San Jose.
In June, a two-tower residential advanced at 188 West St. James St. was purchased by Machine Funding Group for $181.9 million via a fast-track foreclosures continuing that wrested possession of the property from a Z&L affiliate.
After practically all of its actual property empire in San Jose has dissolved via a mix of property gross sales at discounted costs or foreclosures proceedings, Z&L Properties seems to be mounting a struggle to hold on to its Greyhound website.
“There is still demand for housing, which means the Greyhound site could be developed,” Staedler mentioned. “But it is complicated calculus to see what makes sense financially.”
