Neglected site eyed for housing

Office building threatened with foreclosure might be bulldozed for homes

A San Jose office property that has staggered in and out of foreclosure proceedings, as well as deteriorated into an eyesore, could be bulldozed and replaced with more than 100 apartments.

The building is at a choice site at 826 N. Winchester Blvd. near Westfield Valley Fair and Santana Row. Despite its prime location, the property has suffered a checkered financial history.

The site has already been seized through foreclosure in 2021. In 2022 and this year, it faced the threat of another loan foreclosure. The building has suffered neglect, been scarred by graffiti and was deemed an eyesore by at least one neighbor who contacted this news organization to complain about the unsightly conditions.

The building had been scheduled to be auctioned off on Jan. 6, but the foreclosure sale was canceled on Dec. 29, shortly after it landed two new loans.

The new loans provided a combined $1.23 million in financing to an affiliate headed up by Kenneth Ryan Koch, a Grass Valley resident who owns the San Jose property.

Now, hope has emerged that the site could be reimagined as a mixed-use housing and commercial development, documents on file with San Jose planners show.

A 137-unit apartment complex is now on the drawing board for this site.

“The demolition of a two-story office building and the construction of a five-story mixed-use building with multifamily residential” housing are the key components of the proposal, according to the city planning files.

The development also would include about 3,200 square feet of commercial space, which could be a combination of a store site or restaurant space, the municipal documents show.

The L-shaped property has frontage on both North Winchester Boulevard and West Hedding Street.

In a separate real estate proceeding on Jan. 25, two Los Gatos commercial properties that Koch owns through a different affiliate were seized by the lender for those sites in a $7 million foreclosure auction.

The San Jose site that Koch still owns and seeks to redevelop as housing is a short distance from the two mega malls. Plus, Santana Row also contains four big office buildings.

That means the housing that Koch has proposed on North Winchester Boulevard could be attractive to people who are working in the vicinity. Tech firms NetApp and Splunk have major San Jose office operations at Santana Row.

It's not clear how much time the owner of the San Jose office has bought by getting the two financing packages that the property landed recently.

San Jose's lengthy approval process for new development can often last the better part of a year — or longer.