San Pedro Square Market suit pits former mayor vs. nephew
Former San Jose Mayor Tom McEnery is at the center of a new lawsuit over an alleged botched business deal involving the city’s popular San Pedro Square Market.
John McEnery IV filed a federal lawsuit Dec. 13 against his uncle, Tom McEnery, alleging that the former mayor exploited him for his own financial gain.
Tom McEnery, who served as mayor from 1983 to 1991, is part-owner of the market — located on St. John Street between San Pedro and Almaden in downtown San Jose — along with his nephew, John McEnery IV, and MCM Diversified Inc., an investment company created and managed by Martin Menne. The market, which opened in 2011, consists of two main buildings with an eclectic mix of food and drink vendors and a large outdoor plaza.
John McEnery IV lives in South Carolina and began looking for ways to sell off part of his shares in the market after indoor businesses were shut down due to COVID-19 public health orders.
“Cash flow stopped, and John P. McEnery IV’s investment became harder to justify from a financial perspective. Unlike his wealthy uncle, McEnery IV’s investment in the LLCs represented a significant portion of his family’s financial assets and income,” the lawsuit states.
John McEnery IV started talking with his cousin, Oliver Herning, about selling him a portion of his shares. But, according to the lawsuit, the former mayor and Menne tried to intentionally ruin that venture soon after they caught wind of it.
Tom McEnery allegedly began dropping by the home of Herning and “pulled out all the stops” to dissuade him from continuing discussions with his cousin, according to the lawsuit.
Tom McEnery and Menne’s efforts eventually were successful and Herning walked away from the negotiations, depriving John McEnery of a viable business partner and the loss of at least $75,000, the suit states.
Patrick Hammon, a partner at the McManis Faulkner Law Firm, called it a “sad case.”
“There have been quite a few bad business dealings between members of the McEnery family for years,” Hammon said. “And it’s sad that the former mayor interfered with a business discussion between his nephew and another one of his nephews.”
Tom McEnery, who said he has yet to be served, called the lawsuit “unfortunate.”
“What we’re trying to do is keep 17 small businesses going within the market and make sure we can pay our bills,” he said.
The former mayor added that he felt the prominent San Jose-based attorney representing his nephew, James McManis, has some sort of vendetta against him.
In 2009, when Tom McEnery’s family proposed the construction of a public market in downtown, McManis filed a complaint with the city’s Ethics Commission on behalf of an anonymous critic.
The 2009 complaint accused Tom McEnery and his family of failing to disclose dozens of meetings, as required by lobbying disclosure rules, while seeking $6 million in city redevelopment aid for the construction of what would become San Pedro Square Market. The complaint was dismissed after a five-month independent investigation that found the McEnerys made a good-faith effort to comply with the lobbying rules despite a few omissions deemed unintentional. The identity of the anonymous critic was never revealed.
Hammon disputes Tom McEnery’s claims, saying that the law firm would never use a client’s case to sort out personal matters.
John McEnery’s firm also owns the Abbott Square Market in Santa Cruz and the Oakland Assembly food hall project.