Historic church's restoration is on hold after arrest
Criminal case embroils Chinese tycoon who owns historical property
A China-based real estate firm has neglected to follow through on the preservation and revamp of a century-old downtown San Jose church, leaving city officials increasingly frustrated by the developer's inaction.
The project arose from a proposal by Chinese development firm Z&L Properties — whose principal executive has been arrested in London amid a San Francisco bribery and corruption case — to restore and rescue the old church and then build two housing towers next to the historic San Jose building.
Instead of that grand vision, First Church of Christ, Scientist, built in 1905, has tumbled into apparent abandonment by its owner, an affiliate of Z&L Properties, which is based in China but has a Bay Area office in Foster City.
“This is turning into negligence,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
The church's current image is
nothing less than forbidding and is in stark contrast to the ambitious plans of years ago for a revived church and two gleaming housing high rises that would have helped to revitalize the moribund St. James Park area.
“I personally have been reaching out to Z&L personnel,” said Nanci Klein, San Jose's director of economic development. “I'm frustrated that the company has not fulfilled its obligations.”
The historic structure is
flanked by a weed-choked and unkempt field and appears to be exposed to the elements. Torrential rains in December and January were just the most recent storms to batter the old church. The building is now only partially covered by a tattered tarp that's fastened with a haphazard web of ropes.
The developer's inability to break ground or rescue the old church fits a pattern.
Z&L Properties has struggled mightily with its Bay Area property portfolio, which is located primarily in downtown San Jose and San Francisco.
The development firm has completed just one Bay Area project, a double-tower housing high rise in downtown San Jose near San Pedro Square with roughly 640 units. Only one tower is available for occupancy.
In 2021, Z&L Properties yielded ownership of one of its development sites, a 1.6-acre property near the corner of Terraine Street and Bassett Street. Z&L's plans for a big residential tower at that location had stalled.
An alliance led by global developer Westbank, local developer Gary Dillabough, and San Jose-based Terrascape, a firm headed by real estate veterans Tony Arreola and Mark Lazzarini, paid $11.4 million for the choice Terraine Street parcel. The property is in a downtown district known as the North San Pedro neighborhood.
Z&L also has failed to begin construction on a housing highrise project at an old Greyhound Station at 70 South Almaden Avenue in downtown San Jose. Recently, the company placed the property up for sale.
“The fact that the Greyhound site is on the market and not the church site is quite telling,”
Staedler said. “They should have put both properties on the market at the same time, listed them together. But Z&L hasn't done that. Maybe they are hoping that the church property will be so neglected that the building will be gone in a few years.”
The difficulties that loom over the downtown San Jose properties owned by Z&L have emerged at an uncertain time for the real estate firm.
Zhang Li, a real estate tycoon and principal executive with Z&L Properties, was detained in London in December 2022 in connection with a U.S. investigation into possible kickbacks and bribery involving a project in San Francisco.
A court in London was told last month that Zhang was wanted in the United States over an investigation into the payment of bribes to San Francisco city officials linked to the granting of permits for a project in that city.
Attempts to reach Z&L at its Foster City phone number were unsuccessful. The number was listed as out of service.
In the meantime, the downtown San Jose church property continues to deteriorate.
“We are most eager for Z&L to sell the property as has been the company's stated intent for some time,” Klein said. “Nothing is happening.”