Housing vs. transit: Why VTA opposes San Jose tower

A major residential development being eyed for downtown San Jose has been given the green light from the city, but the project may never be built due to a property dispute with a transit agency.

The 26-story Eterna Tower project, which Roygbiv Real Estate Development is hoping to build at 17-31 E. Santa Clara St., is right in the path of the VTA-BART downtown San Jose extension project.

Robert Manford, the city’s deputy director of planning, approved the tower project at a hearing Wednesday. While he acknowledged the city doesn’t have a say over whether the project ultimately gets built or not, he thinks it’s possible.

“This is a transit oriented development. From a planning standpoint, it definitely would be feasible with a BART station,” Manford said. “I think with creative design and a lot of good negotiation, this can be a very successful project.”

The transit agency VTA says the apartment tower can’t coexist with its future station, which will have one of its two entrances located between First and Second streets along Santa Clara Street, essentially underneath where the tower is planned.

“Either there can be a downtown San Jose BART station, or there can be an Eterna Tower. There cannot be both,” Ron Golem, director of real estate and transit-oriented development for VTA, told San José Spotlight.

There are two existing buildings on the site, dating back to the late 1800s, that would be demolished to make room for the tower. The 272-foot-high tower will include 192 apartments with at least 20% designated as affordable for people earning up to 60% of the area median income or less, according to city reports.

In Santa Clara County, a couple earning 60% of the area median income would make about $81,000 annually, and a family of four would earn roughly $101,000 annually, according to the U.S. Department of Housing and Urban Development.

The transit agency has been working for months through an eminent domain process—the legal route for government agencies to take private property for public projects—to purchase one of the parcels where the tower is planned from an LLC controlled by Roygbiv for “fair market value,” Golem said.

He said the developer and VTA signed an agreement that gives the public transit agency physical control of the property while the parties negotiate a fair market value price for the parcel.

But because the developer’s name is still on the land title, city officials said the public hearing for project approval needed to go forward as planned.

A second parcel where part of the tower would go is controlled by another owner, Lars Fuller and Z Hanna LLC, and VTA has started a court action against that owner in an attempt to take the property after VTA’s initial offer of $1.54 million was rejected, according to Golem and court filings.

Loida Kirkley, CEO of Roygbiv, declined to answer questions from San José Spotlight about the process with VTA, citing ongoing legal action. Roygbiv’s architect on the project, Kurt Anderson, said the project’s engineers believe the apartment tower and BART can coexist.

“Our design team has reached out to the VTA and never have they once had a ‘design meeting’ with us in regard to their project. Our consultants believe that there is no issue with coexistence of both uses on that site,” Anderson told San José Spotlight.

With 20% of the apartments designated affordable, the developer qualifies for a density bonus under state law, allowing more units in the tower than what would have originally been allowed under city rules.

Under the state law, the developer is also being granted a host of waivers and exceptions to city development standards, the most significant being the elimination of parking requirements. The city council earlier this year approved a plan to eventually eliminate parking minimums for new development citywide.

Contact Joseph Geha at [email protected] or @josephgeha16 on Twitter.