SAN JOSE — City officials have launched a lawsuit against the owners of an empty and abandoned downtown San Jose property that has become a municipal site of blight.
The vacant buildings have addresses of 35 and 49 East Santa Clara Street and 9 North Second Street, according to documents on file with the Santa Clara County Recorder’s Office and County Assessor’s Office.
The city of San Jose has initiated a lawsuit against the owners of the property. The site consists of two buildings that are each three stories in height, according to a copy of the legal complaint that City Attorney Nora Frimann provided to this news organization.
The legal action tied to the property has emerged at a time when blight problems haunt San Jose.
James Eu, Grace Eu and David Eu, along with an affiliate they control, Isis Properties, were named as defendants in the legal complaint.
“Defendants have permitted the property to fall into neglect and become a public nuisance for the neighboring community,” the city of San Jose states in its lawsuit.
Among the violations, the lawsuit claims: The defendants didn’t repay a $1.35 million loan that the now-defunct San Jose Redevelopment Agency provided to the property owners in 2004 — more than two decades ago.
Yet even at the time the city agency was preparing to provide the financing, the buildings were deemed to be in a crumbling condition.
“The site is currently improved with two deteriorating three-story buildings, commonly known as the Dr. Eu Buildings and otherwise identified as the Bassler & Haynes and Beach Buildings,” stated a city Redevelopment Agency document that was circulated at City Hall in 2004.
More than 20 years later, the buildings are still deemed to be in a decaying state. It’s also a property that now is a magnet for woes of a more contemporary nature.
“From July 2020 to January 2025, the property experienced frequent break-ins and trespass by unauthorized individuals,” the city legal filing states. The property presents an ideal condition for unhoused individuals to use the building for temporary shelter due to the building’s lack of maintenance and security.”
San Jose is under heightened pressure to clean up the blight in its downtown and other areas ahead to global events headed to the South Bay such as the Super Bowl, multiple matches for the World Cup and a key round of the NCAA Men’s College Basketball Tournament.
“Negligent property owners can’t be allowed to hold our downtown hostage for years on end,” San Jose Mayor Matt Mahan said in comments his office texted to this news organization. “Inaction has consequences.”
City officials have been forced to board up the buildings on at least 13 occasions to prevent unauthorized entries and residencies inside the property, the complaint claims.
Complicating matters, according to the lawsuit: toxic materials have surfaced at the site.
“The property, prior to being purchased by James Eu and Grace Eu, was a hotel with a drycleaning operation in the basement, which released tetrachloroethylene, or PCE, a dangerous solvent, into the soil and groundwater,” the city states in its lawsuit.
In 2018, the state Regional Water Board issued a cleanup order for the property following the discovery of the PCE contamination. The defendants didn’t comply with the order, the city lawsuit claims.
The levels of PCE in the groundwater and elsewhere associated with the materials in the building were deemed hazardous.
“These concentrations pose a significant threat to water quality and human health,” the Regional Water Board stated in a July 2024 notice of violation.
San Jose began receiving complaints about the property in 2018, according to the complaint. The city has issued numerous demands to the property owners to remedy the blight and security problems on the site.
In 2020, the city began efforts to collect what it claims the property owners must pay San Jose. It appears the city’s efforts have failed to this point.
“No fines have been paid and the invoices and delinquency notices have been ignored,” the city’s lawsuit claims.
San Jose is requesting that the court appoint a receiver to seize control of the building and its assets in order to clean up and secure the buildings from unauthorized entry, the legal papers show.
The city has taken this approach to combat blight at another notorious and neglected downtown San Jose site, 100 North Fourth Street.
The mayor believes the property’s condition has triggered significant problems in this part of San Jose.
“We will do everything in our power to restore this section of our downtown’s main corridor,” Mahan said.