Restaurant, tennis courts to get boot
Santa Clara votes to use eminent domain for City Place project
The city of Santa Clara wants to force a restaurant and some tennis courts off a few parcels it owns to pave the way for the City Place development, a massive mixed-use residential, retail and entertainment complex across from Levi’s Stadium.
The City Council voted Tuesday to use eminent domain to break long-term leases with David’s Banquet and Conference, which has operated out of a city- owned building since 1999, and the Hyatt Regency, which since 1985 has been allowed to use the publicly-owned tennis courts at Santa Clara Golf and Tennis, which are located next to the proposed development site.
This appears to be the first time the city of Santa Clara has ever used eminent domain, according to city spokeswoman Lenka Wright. “No city records have been found at this time that in- dicate otherwise,” Wright added.
Officials say the action is necessary to build infrastructure improvements, such as roadways, utilities, storm drains and a landfill gas collection system, on the city- owned, 240- acre development site — a former landfill that is currently a golf course.
The city also plans to move Stars and Stripes Drive over the site of the current banquet hall to improve traffic circulation to and from Great America Train Station and Tasman Drive. The development site is across from Levi’s
Stadium and Great America amusement park.
The owner of David’s Banquet and Conference told the council there’s no reason the city can’t build roads and infrastructure around his restaurant. Nor is it necessary to immediately close the banquet hall since the the project isn’t expected to be completed until 2035, he said.
“You don’t take away from a small guy to give it to a big guy,” Ebrahimi said. “When you have a contract, you stay within the contract.”
Ebrahimi sued the city in 2015 after it changed the multi-year lease for his other restaurant to monthto- month, although he dropped the case in 2017 before it went to trial. The city then filed a separate court action to evict that restaurant and prevailed. In both cases, the courts awarded attorney fees to the city and Ebrahimi appealed.
Although the 20- year lease for the banquet facility ends in October 2019, it allows Ebrahimi to request two five-year extensions. Because the city can’t unilaterally terminate the lease as long as Ebrahimi pays rent on time and satisfies other conditions, it needs to use eminent domain to end the deal.
Ebrahimi called the city’s offer for the value of his lease — $5,000 — “shocking.”
The city is also breaking terms of a ground lease with Hyatt Regency, which paid to construct four of the six tennis courts at Santa Clara Golf and Tennis and has has a lease to use them. The hotel also has rights to use the golf course that is being replaced with the City Place development.
Hyatt submitted a letter opposing the eminent domain action, although no representative appeared at Tuesday’s public hearing.
The city has offered to pay Hyatt $306,000 to cover the cost of building those tennis courts and loss of value for no longer being able to use them and the golf course.
In a statement released Wednesday evening, City Manager Deanna Santana said the city has been working with Ebrahimi for “more than six months to resolve this matter.” Santana said the $5,000 offer was determined by a certified appraiser and Ebrahimi has not secured an alternate appraisal to challenge the offer.
Assistant City Manager Ruth Shikada said leaving the facilities on the site isn’t feasible, in part because sewer and gas infrastructure has to be built above ground.
“We can’t dig under what we currently have because what we currently have is a landfill,” Shikada said. “Everything has to be raised to accommodate that.”
The City Council voted 5-1, with council Karen Hardy dissenting and Patricia Mahan absent, to proceed with eminent domain to sever the banquet hall lease. It voted unanimously to pursue eminent domain action for the tennis courts lease.
The vote initiates a court process in which a judge will decide whether eminent domain is appropriate and whether to allow the parties to reach a settlement. If they can’t reach a deal through mediation, the process could go to a trial.
To condemn and seize property or leases under eminent domain, the law requires the government to demonstrate that it tried to negotiate before invoking the power, and that its acquisition is in the public interest and minimizes harm to private entities.
The city is working with Ebrahimi to relocate his business and would pay for any moving costs, accord- ing to Santana’s statement.
Ebrahimi said the locations proposed by the city, including some in Gilroy, would not work for his business or be comparable to the current location and would harm his restaurant’s brand. He said he has no choice but to push for a trial.
“My trademark is ‘ David’s of Santa Clara,'” Ebrahimi said. “In our trade… it takes years of hard work and sacrificing to build up clientele.”
The City Place development envisions 1,680 residential units, a 700-room hotel, 5.4 million square feet of office space, 1.1 million square feet of retail, 250,000 square feet of dining space and 190,000 square feet for entertainment venues. It would also include a 31- acre public park.
The project was approved by the council in June 2016 but was delayed after the city of San Jose sued Santa Clara, arguing the development would stick San Jose with the problem of housing the project’s workforce. A judge ruled in Santa Clara’s favor in November 2017.
According to Wright, the developer will pay for public infrastructure improvements on the site.