SAN JOSE — The municipal government could seize ownership of an abandoned historic church property in San Jose that has become an eyesore after years of neglect, under a proposal by the city’s mayor.
The property is the First Church of Christ, Scientist building in downtown San Jose at 43 East St. James Street, a historic church site that has become one of the city’s most blighted properties.
First Church of Christ Scientist, a historic empty building at 43 East St. James Street in downtown San Jose, February 2024. (George Avalos/Bay Area News Group)
“We have asked for action, maxed out our fines and two years later, we still have a blighted eyesore in our city center,” San Jose Mayor Matt Mahan said in comments texted to this news organization.
China-based Z&L Properties, acting through an affiliate, is the real estate firm that owns the property. Z&L had promised to restore and preserve the old church and develop two housing towers next to it.
Workers remove debris and scaffolding from the historic First Church of Christ, Scientist at 43 East St. James Street in downtown San Jose, August 2023. (Karl Mondon/Bay Area News Group)
Instead of high-rise housing and vibrant adaptive reuse of the historic building, the church is boarded up and derelict, while the residential towers have never been built.
Under the mayor’s proposal, San Jose would pursue an eminent domain proceeding to gain a court order that would enable the city to buy the church and the adjoining vacant lot and thereby wrest ownership from Z&L Properties.
A possible eminent domain proceeding for the church is included in Mayor Mahan’s budget message to the San Jose City Council, which is slated to consider the proposals in the message at this week’s meeting.
By taking the eminent domain route, the city would file a lawsuit against the Z&L affiliate as a way to gain court approval for the price San Jose would pay to wrest ownership of the property from the real estate firm.
“Z&L is going from land owner to land loser if this year’s budget message is passed by the council,” Mahan said in the comments he provided to this news organization.
The blight at the church has been visible for years.
About four years ago, the unsightly conditions had morphed into a full-fledged eyesore, as documented by Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
By 2021, as Staedler reported, a huge tarp that was wrapped around the abandoned church began to rip apart.
At least three years of exposure to wind, rain, heat and sun shredded the tarp, leaving it tattered and decaying.
In 2024, construction executive James Salata led an effort to finally remove the tarp and reveal the church. The endeavor also enabled a cleanup of the church site as well as a repair of a hole in the building’s roof.
Z&L Properties burst onto the local development scene several years ago with plans to dramatically reshape San Jose’s skyline with a flock of residential towers downtown.
Several years after the city approved the array of proposals, Z&L’s affiliates have constructed just one project — and even that landmark site is mired in a loan default and faces foreclosure.
Among the struggling Z&L projects other than the old church site:
— 188 West St. James St. A lender has filed a notice of default for a delinquent $264 million construction loan. The double-tower residential complex, which totals more than 600 units, is the only San Jose project that Z&L ever constructed.
— 70 South Almaden Ave. The former Greyhound bus terminal was once approved as the site of a 708-unit housing highrise, but the Z&L Properties affiliate that owns the site never broke ground. Now, the property faces foreclosure due to the owner’s default on a $19.5 million loan.
— West St James Street and Terraine Street. Z&L had proposed a large housing development but never broke ground. Z&L eventually sold the property near San Pedro Square to a real estate alliance of global developer Westbank and Bay Area developers Gary Dillabough, Tony Arreola and Mark Lazzarini.
— The 3,564-acre Richmond Ranch in southeast San Jose. In 2017, a Z&L affiliate paid $25 million for the pristine property. In January 2024, the Z&L affiliate sold it for $16 million through an intricate plan to eventually enable the Santa Clara Valley Habitat Agency and the Santa Clara County Parks and Recreation Department to buy the property. Z&L never disclosed its game plan for owning the vast ranch.
A possible eminent domain proceeding on the old church site next to St. James Park means affiliates of Z&L Properties have sold two San Jose properties or face the prospect of losing the other three through foreclosures or a court proceeding.
“Enough is enough,” Mayor Mahan said. “We can’t allow bad actors to take advantage of our city.”
