Chinese developer in SF corruption case puts condo tower on market
Luxe project has an asking price of $300M
Unsold condominiums in a double highrise in Downtown San Jose developed by a Chinese billionaire accused of corruption are for sale at more than $500,000 each.
The unpurchased condos in the new 640-unit luxury complex at 188 West St. James Street are looking for a buyer with a total price of $300 million, the San Francisco Business Times reported, citing unidentified sources.
That works out to $537,000 per unit when excluding the 82 condos that have already been sold in the project’s West tower, the only one open.
Brokers Brandon Geraldo, Matt Kroger, Ryan Wagner and Maxwell Machiorlette of JLL’s capital markets hold the listing. A new buyer could sell off the remaining 558 condos or lease them, according to JLL.
Z&L Properties, a Foster City-based developer whose chief executive was arrested in London in connection with a San Francisco bribery case, has struggled with its Bay Area real estate portfolio.
The firm’s one completed project is the double condo tower near San Pedro Square.
The project’s sale comes after nearly six years of delays, financing troubles, labor law violations and a worker suicide. The project was initially supposed to cost $250 million.
Originally called Silvery Towers and now known by its address, 188 West St. James, the project was developed by Z&L Properties, led by Zhang Li, a Chinese real estate tycoon who co-founded R&F Properties in Guangzhou, China.
Zhang was arrested in the British capital late last year on bribery charges connected to a high-profile corruption case in San Francisco centered on former Public Works Director Mohammad Nuru. He was released after paying 15 million British pounds in bail.
The developer began offering condos in the 303-unit West Tower last year. Construction was largely completed in 2021, though work continues inside the condominiums.
The complex, less than a mile from Diridon Station and the SAP Center, features studio-, one-, two- and three-bedroom units with stainless steel appliances, white-washed oak cabinets, quartz countertops and oak floors, according to JLL. The average condo is 936 square feet.
The condominiums come with a community fitness center, 75-foot pool, barbecue and private work areas, and 30,000 square feet of unoccupied storefronts.
Z&L, with the temporary detention of its chief executive, has retreated from its real estate interests. The firm had acquired a dozen projects in the Bay Area and Los Angeles in 2014 and 2015, during the peak of the China property mania, and was planning to build 3,400 high-end condos, according to GSI Exchange.
But in 2021, Z&L Properties sold a 1.6-acre development site near Terraine and Bassett street in the North San Pedro neighborhood for $11.4 million, after plans for a 313-unit tower stalled.
Z&L failed to break ground on a housing highrise at an old Greyhound Station at 70 South Almaden Avenue in Downtown San Jose. In January, it put the property up for sale.
The company also failed to restore the former First Church of Christ, Scientist at 43 East Saint James Street, where it is slated to build two housing towers. Currently the 118-year-old building is exposed to the elements.
In San Francisco, Z&L owed $2 million in back taxes on The Oak, a boarded-up 109-unit condo tower at 55 Oak Street in San Francisco.
Last month, Supervisor Dean Preston called for an investigation into a stalled grocery store at Z&L’s 139-unit condo project at 555 Fulton Street. The troubled development is a subject of the city corruption scandal involving Zhang and Nuru.
Zhang was caught up in the federal corruption case against Nuru, who was indicted in January 2020 on public corruption charges.
The indictment states that Nuru had met the developer in China on multiple occasions and that Zhang had showered him with gifts and put him up for free at five-star hotels. In exchange, Nuru “used his official influence with other city officials to solve problems,” according to the San Francisco Chronicle.
— Dana Bartholomew
COMPANIES AND PEOPLE