San Jose towers deal leaves notorious real estate empire near collapse

SAN JOSE The purchase of two San Jose housing towers offers hope of a turnaround for the troubled residential complex but also is a reminder of a legacy of downtown blight over which its owner presided A double-tower complex consisting of more than residential units has been bought by New York City-based Machine Commitment Group which aims to promptly orchestrate the project s rebound The deal marks a major milestone in the unraveling of the Z L real estate empire in downtown San Jose Z L has left a trail of broken promises in San Jose neglecting historic landmarks abandoning shovel-ready housing and sitting on properties that should be region assets not population eyesores San Jose Mayor Matt Mahan stated The two towers that Machine Capital Group bought are located at West St James Street The transaction ends a long-running ordeal at West St James that has stretched over about eight years During the Z L affiliate s ownership a loan delinquency foreclosure threats lawsuits project delays construction blunders and defects evidence that certain workers were forced to live in an East Bay warehouse accusations of slave labor and a suicide when a victim jumped off one of the highrises have haunted the property A fresh start for West St James is the guiding principle and strategy pronounced by Eric Rosenthal managing partner for Machine Stake Group The new owner has wide-ranging plans to improve the fortunes of the West St James towers Each tower has roughly residential units China-based Z L Properties acting through an affiliate had been the owner and developer of the two towers that are now owned by Machine Venture Group Our firm is uniquely positioned to apply its construction finance and improvement expertise to stabilize building operations relaunch sales and provide an central housing cure to one of the the greater part dynamic residential markets in the country Rosenthal revealed Yet while a buyer has taken control of the West St James towers that doesn t mean the effort will without delay bear fruit warned Bob Staedler principal executive with Silicon Valley Synergy and a land-use consultant Completing this project will be an immense undertaking Staedler noted Don t expect this to be completed in the short term Z L Properties however even with the deal to sell the West St James towers nevertheless has left behind a forbidding legacy of wrecked projects bedeviled by blight and deteriorating buildings First Church of Christ Scientist a historic empty building at East St James Street in downtown San Jose February George Avalos Bay Area News Group A viable key hasn t materialized for two parcels owned by Z L affiliates that have yet to be developed despite their advantage of commanding prime locations Both had been expected to be the location of future housing towers Neither has broken ground Here are selected details of the respective status of the two downtown San Jose projects that affiliates of Z L Properties continue to own East St James Street Z L agreed to protect and renovate an old church at this site next to St James Park Instead the real estate firm has neglected the historic building and allowed it to fall into disrepair Z L has also failed to develop housing towers on the site At one point the church structure was covered by a huge tarp that eventually shredded with exposure to the sun wind and rain The tarp has been removed The First Church of Christ Scientist remains abandoned South Almaden Avenue Z L had proposed a housing project at the site of a one-time Greyhound bus terminal The old bus depot has become an eyesore City code inspectors call it a community nuisance Graffiti has defaced the site at times Despite being on the city s radar screen for more than six years San Jose has done little more than threaten fines and penalties for the owner The city of San Jose requirements for Z L to divest all of its properties Staedler reported Z L s real estate adventures reached as far away as a site of pristine open spaces at the far end of south San Jose In a Z L affiliate paid million for the -acre Richmond Ranch in southeast San Jose In January the Z L affiliate sold it for 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 match plan for owning it At Terraine Street and Bassett Street in downtown San Jose Z L had proposed a large housing advancement but never broke ground Z L 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 Machine Financing Group might need to be particularly skilled to succeed with the West St James towers I hope the new owner has the capital and a very creative contractor to deliver the residential units Staedler commented The project was completed in Machine Assets Group intends to recapitalize the project prepare units for sale and re-engage with the group to restore confidence in the towers The real estate firm intends to sell the remaining condos With its prime location near San Pedro Square and proximity to major tech employers West St James is poised to regain its stature as the largest part sought-after address in San Jose Rosenthal mentioned The full scope of the task that awaits Machine Stake wasn t instantly clear While I m encouraged by progress at West St James the First Church of Christ Scientist and the Greyhound station remain stuck in limbo Mayor Mahan noted We re exploring every option to ensure these sites deliver the jobs and housing our neighborhood demands