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, according to documents filed on Wednesday with the Santa Clara County Recorder’s Office.
Previously, city officials approved the development of a tower at 70 South Almaden Ave. that would have contained 708 residential units. However, the project’s developer, an affiliate of China-based Z&L Properties, never broke ground.
The site of the former Greyhound bus terminal at 70 South Almaden Avenue in downtown San Jose. (Google Maps)
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.
“Foreclosure by the lender would be the best outcome for any chance of this site being developed,” said Bob Staedler, principal executive with land-use consultant Silicon Valley Synergy. “Z&L was widely touted as a boon for San Jose and it’s been a disaster.”
Full Standard Properties, the Z&L-linked entity, bought the former Greyhound bus terminal 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 has become an undeveloped lot with an uncertain future.
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, but only one has been built.
Among the struggling Z&L projects:
— 188 West St. James St.: A lender 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 agreed to protect and renovate an old church at this site next to St. James Park, 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 but never broke ground. Z&L eventually sold the property near 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 it 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 it.
“We need these sites out of Z&L’s hands so we can start the clean-up process while a sensible development plan is figured out,” Staedler said.
Originally Published: February 27, 2025 at 5:30 AM PST
