SAN JOSE — A dispute between a powerful transit agency and a legendary real estate firm over the value of a downtown San Jose property needed for a future BART stop could wind up in a court trial.
The Santa Clara Valley Transportation Authority is attempting to seize a building with addresses ranging from 41 through 55 West Santa Clara Street in San Jose, a parcel needed for a future BART station, if or when BART reaches the city’s downtown district.
Downtown San Jose BART station entrance, West Santa Clara Street between North First Street and North Market Street, concept. (Foster + Partners)
San Jose-based real estate firm Swenson, acting through an affiliate, is the principal owner of the property. The building on the site totals roughly 16,500 square feet.
In 2021, the VTA filed a lawsuit that sketched out the transit agency’s intentions to grab the site through an eminent domain process.
At the heart of the dispute is a wide gap between what the VTA hopes to pay for the property and what Swenson believes the site is worth.
The transit agency claims the property has an overall value of $9.5 million, documents on file in Santa Clara County Superior Court show. That would work out to roughly $575 a square foot, according to an appraisal by Smith & Associates detailed in court papers.
Swenson believes the property is valued at around $17.4 million, according to an appraisal by Valbridge Property Advisors and Hulberg & Associates. That would equate to roughly $1,054 a square foot.
“Our appraisal depended primarily on comparable sales primarily west of First Street while the VTA tended to use comps from sales east of First Street,” said Norm Matteoni, an attorney representing the Swenson affiliate that owns the site.
A review of the comps listed in court papers showed that the sales to the west of First Street tended to be considerably higher in value while those that the VTA cited for properties east of First Street were predominantly of lower value.
The VTA has stated on numerous occasions in response to requests from this news organization regarding the agency’s eminent domain efforts that it doesn’t comment on ongoing litigation.
The legal proceeding is scheduled for a settlement conference in early April. If no settlement is reached, a jury trial is scheduled to begin in mid-April, the court case docket shows.
The VTA hopes to seize the property as part of the quest to bring BART into San Jose’s urban core with one of two stations in the city’s downtown.
The East Santa Clara Street building that’s in dispute is expected to be at the entrance of the Downtown San Jose BART station.
The BART project, however, has been haunted by a series of delays and cost overruns that have steadily ratcheted up the estimated price for the BART extension into downtown San Jose.
VTA officials claim BART service into downtown San Jose that also reaches the Diridon train station on the western edges of the city’s urban core would spur transit efforts and fuel economic activity in the South Bay and the Bay Area generally.
“Completion of the project will finally ‘ring the Bay’ with frequent rail service,” the VTA said in a web post.