The owners of the San Jose Flea Market may have reversed a plan to use builder’s remedy to scale back its redevelopment, and could agree to build 3,450 homes in exchange for a financing district to pay for infrastructure.
The Bumb family may cut a deal to drop its application using the legal loophole and fall back to its initial plan in exchange for a community facilities district at 1590 Berryessa Road, the Silicon Valley Business Journal reported.
Last fall, the owners of the 61.5-acre market filed plans to downsize its redevelopment to 940 homes, from as many as 3,450 the family and City Council envisioned two years ago.
The proposal was filed under the builder’s remedy, a provision that streamlines project approvals that contain affordable homes when a county or city such as San Jose fails to certify its state housing plan. Such projects must have at least 20 percent affordable housing.
San Jose Mayor Matt Mahan, District Four Councilman David Cohen and State Assemblyman Alex Lee each accused the Bumbs of perverting the spirit of the law.
Now Cohen and a Bumb representative are hashing out a deal to build more homes with little help from the city.
“It was in everyone’s best interest to end the conflict and figure out how to move forward to build this project for the community,” Cohen told the Business Journal this week.
The original plan for the project known as Market Park called for up to 3,450 homes and millions of square feet of offices to replace much of the flea market founded in 1960 by George Bumb Sr. on a former farm.
The project near the Berryessa/North San Jose BART station would set aside 5 acres for a new market.
Erik Schoennaur, a land-use consultant representing the project, previously said that it wouldn’t pencil out under current market conditions.
“The current project plan is infeasible because half the site must be commercial uses,” Schoennaur told the Business Journal last month. “It is not feasible to finance $100 million in site infrastructure if the commercial half of the development is infeasible to build.
“We need relief from the city, or nothing will get built.”
That’s why the Bumbs turned to the builder’s remedy to downsize the project to 940 homes and 45,500 square feet of ground-floor shops and restaurants. The application was filed in October, three months before state housing regulators approved the city’s housing plan.
San Jose contends that its housing plans were substantially compliant as of June 20 and has taken the position that any applications submitted afterward would not be allowed to move forward. That means the flea market project would have required a lawsuit to move ahead.
The creation of the financing district doesn’t commit the city to spending public dollars for the project, Cohen said. Instead, future development will generate fees that would cover the infrastructure costs.
“We look forward to working with Councilmember Cohen to advance our development,” Schoennauer told the Business Journal this week. “The two areas that are important are that the city move forward quickly with the community financing district and it’s also important for the city to consider more flexible options on the commercial blocks.”
— Dana Bartholomew
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