San Jose weighs upping fines for neglected properties

The continued neglect of a downtown San Jose landmark is prompting politicians to increase fines for delinquent property owners.

San Jose Mayor Matt Mahan, Councilmember Omar Torres, who represents downtown San Jose, and several residents spoke this morning outside the dilapidated First Church of Christ Scientist building about a proposal to raise maximum fines levied against defiant property owners from $100,000 to $500,000. China-based real estate firm Z&L Properties has owned the property for six years, and in that time it has sat in disrepair, covered in tarps and scaffolding.

“Our constituents call (this) the ‘Trash Bag Church,’” Torres said. “We are left with nothing but a blighted eyesore owned by a billionaire developer who has been involved in scandal.”

Since June, the city has fined Z&L $1,000 a day because of its failure to restore the historic church built in 1905, and will soon reach the city’s current cap of $100,000. Z&L has yet to pay any of those assessed fines, and while the city could place a lien on the property, it’s “unclear” if the city will ever be paid back, Mahan said.

“We have to exhaust the fines first, but we’re told that the legal options are long, complicated and fairly limited,” Mahan said.

Bob Staedler, principal at Silicon Valley Synergy, a San Jose-based land use and development consulting firm, said until the city manager is on board, it’s all just talk.

“The mayor doesn’t run the city, it’s the city manager,” Staedler told San José Spotlight. “I had recommended this months ago, and nobody responded well to that suggestion … The key thing is, is city staff going to do this? Or are they going to say no?”

Carolina Camarena, a city manager’s office spokesperson, said the proposal is under review. The office will make a recommendation to the city council at an upcoming Rules and Open Government Committee meeting.

Mahan also expressed interest in lobbying the city to take ownership from Z&L, but that would require a willing partner from Z&L and permission from Santa Clara County and the to repurchase the property, he said.

Despite Mahan’s comment on “limited” legal options, Staedler said there is a path to the city demanding Z&L sell the property back to the city.

The building and surrounding site was formerly a city-owned redevelopment property that was sold to Swenson Builders and later resold to Z&L with the city’s approval. The agreement included renovating the landmark church building. Staedler said the same terms were handed to Z&L.

“There’s a provision in the agreement that allows for them to take back the property if they pay all proven costs and the purchase price,” Staedler said. “It’s not simple … but they do have the means to do that.”

Z&L planned to build the “Park View Towers” project on the site, with two buildings including 221 homes and almost 19,000 square feet of retail space, but the plan never got off the ground.

The former church, located at 39 E. St. James St., has sat vacant since at least 1975. The congregation that built it for a church relocated to The Alameda in the 1960s. The building then went through a series of reuses, including a movie theater.

Z&L has owned the property since 2017. Law enforcement arrested its co-founder, Zhang Li, in London in December in connection with a bribery scheme out of San Francisco.

Z&L has been selling off other properties since Li’s arrest, but company representatives have previously declined to say if the church site will be sold.

The First Church of Christ Scientist is on the Preservation Action Council of San Jose’s “Endangered 8” list, historical and architectural landmarks threatened by neglect and redevelopment. Executive Director Ben Leech said the group started in large part to save the church building from absentee landlords.

“This is the centerpiece of a nationally registered historic district,” Leech said at the news conference. “Whatever happens with the lot, let’s not wait for that ultimate solution to prevent us from imagining what the building itself can be. That has been our message, I’m embarrassed to say, for more than 30 years.”

Contact Ben at [email protected] or follow @B1rwin on Twitter.