Z&L Faces Fines in San Jose for Neglecting Historic Church

Embattled Chinese developer Z&L Properties has run afoul with the City of San Jose over the fate of a historic Downtown church.

The financially troubled firm, tied to a corruption scandal in San Francisco, has been written up for code violations in San Jose and faces a $1,000-a-day fine for neglecting the former First Church of Christ, Scientist, at 43 East Saint James Street, the San Francisco Business Times reported.

Z&L, led by Zhang Li, had planned to restore the church and build two housing towers beside it.

Instead, the former Christian Science church, built in 1905, has tumbled into apparent abandonment by its owner, an affiliate of Z&L.

The church, designed by San Francisco architect William Polk, is now exposed to the elements. Torrential rains have impacted the building surrounded by a weed-choked field and covered by a tattered tarp.

Because of the poor condition of the tarp, the city landmark is at risk, Nanci Klein, San Jose’s director of economic development, told the Business Times.

“Parts of the tarp are flying into the street,” Klein said. “It’s also extremely unsightly.”

The city had ordered Z&L to install a security system, fire protection measures, outside lights and a replacement tarp by mid-March, in addition to evicting unpermitted food vendors. Z&L never complied with the order.

Last month, a city appeals board gave Z&L until mid-June to correct the violations, in addition to requesting a building permit to rehabilitate the church. If not, it faces a $5,000 fine and a $1,000-per-day penalty charge that caps at $100,000, with the case given over to local prosecutors.

Representatives of Z&L did not respond to a request for comment from the Business Times.

San Jose officials are also investigating alleged code violations at two of Z&L’s other properties.

One of its former employees has alleged in a recent suit that the company defrauded mortgage backer Fannie Mae, and has failed to pay bills for or properly maintain a pair of residential towers it constructed in the city, according to the Business Times.

Z&L Properties, with an office in Foster City, has struggled with its Bay Area real estate portfolio.

Zhang, its top executive, was arrested in London 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 and now faces extradition to the U.S.

An 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” the developer encountered, according to the San Francisco Chronicle.

— Dana Bartholomew