URGENT UPDATE: A new housing plan is developing for the abandoned Greyhound station in downtown San Jose, as Z&L Properties seeks to avert foreclosure on its delinquent loan. Court filings reveal that the company, through its affiliate Standard Properties, is shifting its strategy from a high-rise condominium project to a more financially viable medium-rise apartment development.
Located at 60 South Almaden Blvd and 70 South Almaden Blvd, the original proposal envisioned a total of 708 residential units. However, the revised plans are unclear, as Standard Properties has yet to specify the number of units in the new submission. The urgency is palpable as the property owner is under pressure to reorganize finances through a Chapter 11 bankruptcy proceeding to delay a looming foreclosure.
The loan secured by the property matured in 2019, leaving an outstanding balance of approximately $21.2 million. This debt has led the lender to request that the bankruptcy court terminate the case, allowing foreclosure to proceed. In a related note, Z&L Properties acquired the site for $39.5 million in 2019, and the property’s current valuation is estimated between $29 million and $32 million, indicating potential equity despite the financial turmoil.
The court documents outline multiple proposals aimed at a court-approved reorganization:
– Seeking a joint venture arrangement for development.
– Making “adequate protection payments” to the primary loan holder.
– Ensuring property taxes, insurance, maintenance, and security costs are covered by affiliated equity holders.
In recent months, Z&L’s real estate history in San Jose has faced scrutiny, with multiple properties sold at discounted prices or lost through foreclosure. The company has been under fire for neglecting a historic church in downtown San Jose, raising community concerns about their management.
The outcome of this bankruptcy case is critical for not only the future of the Greyhound station property but also for the broader housing landscape in San Jose. The city’s Planning Department has yet to post any new development proposals for the site, heightening speculation about the project’s viability.
WHAT’S NEXT: The timeline for a reorganization plan remains undisclosed, but Standard Properties is aiming to finalize a joint venture that could reshape the property’s future. Community members and local leaders are watching closely, as the potential for new housing could address ongoing housing shortages in the area.
Stay tuned for the latest developments on this major housing initiative in downtown San Jose, as the implications for local residents and the housing market continue to unfold.
