San Jose Cracks Down Z&L Properties Abandon Historic Church

The City of San Jose has imposed property liens against Z&L Properties 18 months after fining the absentee landlord for abandoning an historic church development site.

The liens come after the embattled China-based developer failed to pay more than $142,000 in fines for neglecting the former First Church of Christ, Scientist, at 43 East Saint James Street, in Downtown, the San Jose Mercury News reported.

In May last year, the city threatened an affiliate of Z&L with $1,000-a-day fines for code violations pertaining to the vacant Greek Revival church.

“The city should have gotten here a long time ago,” Bob Staedler, principal with Silicon Valley Synergy, a land-use consultancy, told the newspaper.

“The city has to have standards and to hold people to account,” he said. “A property can’t just sit like this. Z&L has been given every chance in the world to do the right thing and they just haven’t done it.”

The financially troubled firm is owned by disgraced Chinese developer Zhang Li, who pleaded guilty to bribery charges in connection with a San Francisco public corruption scandal, after being placed under house arrest in London.

Z&L had planned to restore the church and build two housing towers beside it. Instead, the former Christian Science church, built in 1905, had tumbled into abandonment by its owner, an affiliate of Z&L.

The church, designed by San Francisco architect Willis Polk, has been exposed to the elements, surrounded by a weed-choked field and once covered by a tattered tarp.

Last year, San Jose construction executive Jim Salata led an effort to remove the tarp, patch a hole in the roof and remove debris from the church and parking lot.

The landmark church has landed on the radar of Preservation Action Council of San Jose, according to Mercury News’ earlier reporting, which listed the property among the group’s “Endangered Eight” historic sites in the South Bay.

Meanwhile, Z&L has met financial headwinds pertaining to a dozen proposed or actual development sites across the Bay Area and in Los Angeles.

This month, an affiliate of Z&L defaulted on a $19.5 million loan tied to a site for two unbuilt housing towers at a former Greyhound bus terminal at 70 South Almaden Avenue in Downtown San Jose. In September, a Houston-based investment group led by Chris Jiashu Xu and William Wang bought the loan for an undisclosed price.

The loan default is the latest setback for Li, a billionaire based in China, who only managed to build one local project, a twin condominium highrise at 188 West St. James Street.

The 640-unit complex is in default on a $264 million construction loan. As of October, the “unpaid principal debt” on the condo complex was just under $169 million, according to the Mercury News.

One of the towers is the subject of a legal battle between its HOA and Z&L over unpaid fees. Last month, the landlord listed about 200 vacant units for rent.

— Dana Bartholomew