SAN JOSE — The site of a proposed downtown San Jose housing highrise that could have produced hundreds of residential units has staggered into default due to a delinquent loan.
In recent years, city officials approved the development of a tower that would have contained 708 residential units. The project’s developer, an affiliate of China-based Z&L Properties, never broke ground, however.
The property that is in default is at 70 South Almaden Avenue next to Post Street, according to documents filed on Feb. 26 with the Santa Clara County Recorder’s Office.
In 2019, Full Standard Properties, the Z&L affiliate, received $19.5 million in financing from Shanghai Commercial Bank. Shanghai Commercial filed the loan default for the site. This marks the second time Shanghai Commercial has filed a loan delinquency notice against the property.
The loan default is the latest in a string of financial setbacks to plague Z&L Properties. The real estate firm burst on the scene several years ago with wide-ranging plans to develop numerous towers in downtown San Jose.
Only one has been built.
Among the struggling Z&L projects in San Jose:
— 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.
— 43 East St. James St. Z&L had agreed to protect and renovate an old church at this site next to St. James Park in downtown San Jose, but instead has neglected the historic building and allowed it to fall into disrepair. Z&L has also failed to develop housing towers on the site, which has become blighted.
— West St James Street and Terraine Street. Z&L had proposed a large housing development on this property but never broke ground. Z&L eventually sold the property near bustling San Pedro Square to a real estate alliance of global developer Westbank and Bay Area developers Gary Dillabough, Tony Arreola and Mark Lazzarini.
— In 2017, a Z&L affiliate paid $25 million for the vast 3,654-acre Richmond Ranch in southeast San Jose. In January 2024, the Z&L affiliate sold the ranchland 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 property.
As for the 70 South Almaden property, foreclosure is possible if the loan isn’t paid in full. The site is the location of a former Greyhound bus terminal.
Full Standard Properties, the Z&L-linked entity, bought the property in 2016 for $39 million from a group headed by Bay Area real estate executive Mark Tersini.
Instead of an eye-catching housing tower, the old Greyhound site in downtown San Jose has become an undeveloped lot with an uncertain future.