Prometheus Snags Financing for Stalled Los Altos Project

Prometheus Real Estate Group reeled in an $80 million loan for its Los Altos multifamily plan after buying the development site out of distress and nearly a year of searching for financing.

The San Mateo-based developer received the construction loan from JPMorgan Chase for its planned development at 5150 El Camino Real, The Mercury News reported. The 3.8-acre property is located two blocks away from the San Antonio Center mall and adjacent San Antonio Caltrain station on a retail- and restaurant-packed artery of the South Bay city.

The project would consist of two five-story buildings that would contain 172 residential units and 24 townhomes away from the busy street. All apartments are planned as rentals, and 29 units would be set aside for affordable housing. Low-income is usually defined as making 80 percent or less of the area median income; in Santa Clara County, that means a maximum annual income of $111,700 for a one-person household, according to the California Department of Housing and Community Development.

Michael DuCote, Prometheus’ director of development, hoped to have a construction loan closed last summer after the developer bulldozed an office building at the site to make way for the new development. “Our intention would be to close a construction loan and be underway with full-fledged construction before end of year,” he told the Los Altos Town Crier at the time.

JPMorgan Chase’s loan represents a major step in making the project a reality after years of setbacks at the site.

In 2021, a Prometheus affiliate paid $48 million for the location, but the project was previously stalled for years after a $42 million loan to pay for the property went into default.

The project’s original developer, Dutchints Development, and its principal executive, Vahe Tashijan, got the loan in 2018 to finance the purchase of the site. The loan delinquency led to a legal showdown in Santa Clara County Superior Court, culminating in a judge issuing an order in 2021 allowing Prometheus to buy the property. The proceeds from the firm’s purchase were used to pay off the lender on the original loan.

Prometheus last year planned an early 2027 target date for completion, though that timeline remains uncertain.

— Chris Malone Méndez