A prominent San Jose developer’s lawsuit against the San Jose-Evergreen Community College District will move forward after the court ruled last week that the district can be held legally liable for an alleged contract breach after pulling out of a lucrative land deal.
“Essentially, (the judge) said if you can prove everything that you say, then legally you’re going to get a verdict in your favor,” said Steve Ellenberg, a lawyer with the firm Hopkins & Carley, who is representing developer Republic Urban Property LLC.
The ruling allows the lawyers for Republic Urban Property to proceed with obtaining evidence to prove the community college district bailed on the deal to build a mixed-use project on a 13-acre parcel of land near the intersection of San Felipe and Yerba Buena roads at the Evergreen Valley College campus in San Jose.
Republic Urban Property is suing the community college district for more than $1 million for allegedly pulling the plug as they continued investing in developing the land. The developer alleges after months of public outreach and pouring hundreds of thousands of dollars into the development, the district did not extend its exclusive negotiation agreement.
They claim the college district failed to negotiate in good faith and violated the terms of the contract. The court said the district can be held legally liable for this, despite rejecting part of Republic Urban’s legal reasoning.
The district, however, argued it did not violate the contract with Republic Urban because the contract allowed walking away from negotiations and not to extending the agreement. The court rejected the district’s claims.
Contrary to what Ellenberg says, a spokesman for the college district said the ruling is in their favor.
“We are pleased with the outcome of the latest ruling and believe the facts of the case remain on our side,” said Ryan Brown, a spokesman for the San Jose-Evergreen Community College District.
Republic Urban entered into an exclusive agreement with the district in March 2018 by making a non-refundable payment of $455,000, Ellenberg said. The developer also committed to a pre-payment of $1 million in base rent to the district.
The developer sought to build a 175-unit senior care housing complex and a 103,000-square-foot-medical office building for the project dubbed Montgomery Park.
But when the agreement between the two sides expired in July — after two previous extensions — leaders for San Jose-Evergreen Community College District took that as an opportunity to mull other options for the surplus land.
Ellenberg explained district leaders had said they would remain committed to the development in April 2019, which prompted Republic Urban to keep putting money into the project.
“We’re confident that we can prove everything we alleged in the complaint,” Ellenberg said. “We only know how they interface with my client, so the information is still yet to come. But we’ll find out and the judge is basically saying you can go forward and find out.”
Contact Mauricio La Plante at [email protected] or follow @mslaplantenews on Twitter.