SAN JOSE — A long-abandoned bus terminal in San Jose is now owned by the property’s lender, an entity that’s headed up by real estate executives who say they are prepared to develop hundreds of homes on the prime site.
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The lender, a Texas-based affiliate of a group whose officials include real estate developer Chris Jiashu Xu and business executive William Wang, has taken ownership of the former Greyhound terminal in downtown San Jose through a foreclosure.
The new owner foreclosed on a delinquent $19.5 million loan for the property, documents filed on Oct. 22 with the Santa Clara County Recorder’s Office show. An affiliate of real estate firm Z&L Properties had owned the site for several years prior to the foreclosure.
San Jose officials had prevously approved a 708-unit housing development on the bus terminal property, whose addresses include 60 and 70 South Almaden Ave.
The Pacific, a 708-unit residential tower at 60 – 70 South Almaden Avenue in downtown San Jose, concept. (CBRE)
The new owners stated in a U.S. Bankruptcy Court filing that they were ready to build a residential tower project of that sort.
“The vacant land at issue is a rotting, empty former Greyhound Station,” the lender stated in a Sept. 15 declaration it filed with the bankruptcy court. “If allowed to proceed” with a foreclosure, “the lender has the resources to develop this piece of property as originally entitled.”
The housing tower that Z&L Properties had proposed never broke ground. Over the years, the old bus terminal was covered with graffiti, and city officials raised concerns that the parcel was yet another site of blight in San Jose.
“Z&L lacked the ability or capacity to develop on the Greyhound site,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “It wasn’t a surprise to anyone that the lender took the property back.”
China-based Z&L Properties put up a considerable legal battle to attempt to ward off the foreclosure. The real estate firm’s affiliate filed two Chapter 11 federal bankruptcy proceedings and also sued in Santa Clara County court.
The court fights all proved futile, however.
It also appears that Z&L lost a considerable amount of money in the form of its equity that was erased by the foreclosure.
The Z&L affiliate claimed that it spent $44.2 million in land purchase and pre-construction activities.
Ultimately, the Xu- and Wang-led group that foreclosed on the loan bought the property in a foreclosure proceeding that placed a value of $22.2 million on the property.
“Let’s see if the lender holds the property for a period of time and flips it or starts off on the development process,” Staedler said. “The city of San Jose should allow the new owners to demolish the site and remove the eyesore from downtown.”
The bus station foreclosure means the once-extensive real estate empire that Z&L Properties had owned in San Jose has now been reduced to a single known property in the South Bay’s largest city.
First Church of Christ Scientist at 43 East St. James St. in downtown San Jose. (Karl Mondon/Bay Area News Group)
An affiliate of Z&L still owns an old historic church at 43 East St. James St. Z&L had proposed a double-tower housing development of that property, a project that also would have renovated the old church.
Yet like many other Z&L endeavors in San Jose, that project has fizzled, and the old church remains a forlorn structure next to an unkempt field in downtown San Jose.
