TDA Investment Group Seizes San Jose Development Site

Foreclosure has hit a downtown San Jose site that Alterra Worldwide once proposed as a residential highrise.

TDA Investment Group, acting through an affiliate, seized control of a former retail space at 27 South First Street in San Jose via a deed in lieu of foreclosure, the East Bay Times reported. It comes after a loan from Copia Lending that originated in 2020 became delinquent.

The outstanding debt at the time of the foreclosure was $13.9 million. The size of the parcel wasn’t reported.

The City of San Jose approved the development of a 24-story, 374-unit development on the parcel. Shovels never got into the ground, however.

The proposed tower’s developer was a group led by Alterra Worldwide and real estate executives Tony Bader and Mike Sarimsakci. They sought traditional financing and creative ways to secure funding to build the project.

The developers tried to attract investors in 2021 in an offbeat effort to raise $100 million. They used a security token offering, or a digital system that would have allowed investors to buy small pieces of ownership in the development, to attempt to bring in investors. Nobody bit, and the site is vacant.

At one point, the building was occupied by an F.W. Woolworth Company department store. Ross Dress for Less also had an outpost at the property, though it closed its doors at the First Street building in 2016. Following Ross’ exit, the Local Color organization began using the site as a pop-up space for local artists.

The location presents a challenge to any development at the site, with properties tightly surrounding it on both sides and the narrowest part of the parcel stretching about 78 feet wide.

It’s unclear what TDA plans to do with the empty building, including whether it will opt to buy the building outright. Any new development at the site could require the owner to acquire adjacent parcels to give it enough room.

— Chris Malone Méndez