SAN JOSE — A real estate firm that’s active in San Jose faces rising fines on one of its downtown buildings if the company fails to address blighted conditions that include a caved-in roof.
The building at 98 East San Salvador St. is owned by an affiliate controlled by real estate executives Gary Dillabough and Jeff Arrillaga, who are active in efforts to redevelop and revitalize the city’s downtown.
Urban Community, the real estate firm that Dillabough and Arrillaga head, aims to bulldoze the building as part of a project to develop eye-catching housing towers at and near the site. Construction hasn’t begun, however.
For now, the building remains empty and its roof has caved in, according to city officials and this news organization’s review of Google aerial maps of the property.
City code enforcement staff, Dillabough, and Arrillaga appeared before the San Jose Appeals Hearing Board on Nov. 13 to discuss the situation at 98 East San Salvador and other sites owned by the real estate executives.
Dillabough and Arrillaga have taken some steps to address the blight, city officials said.
“They (the property owners) have security trying to keep up with the night activity,” according to posted minutes of the Nov. 13 appeals board meeting. “They are having issues with the homeless entering the property and want to make this a better place.”
The officials, however, urged the property owners to do more, particularly related to some significant structural damage at the 98 East San Salvador location.
“There is one property located at 98 San Salvador that has a roof caving in,” the meeting minutes stated. “Code Enforcement asked the property owners back in April to get a damage survey so Code Enforcement can assess, along with the Fire Department, safety to the neighborhood.”
Arrillaga stated during the meeting that he and Dillabough have hired security to keep an eye on the property. They both believe that homeless individuals are responsible for much of the blight.
“People are walking around with shopping carts, with saws, drills, and axes. This place is under attack. … This is exhausting. We are at our wit’s end,” Dillabough said. “We have invested over $400 million in the downtown to try to make this better. We can go out there and paint it and change it every day. And in the morning it will be different again.”
City officials decided to impose a fine of just under $2,700 on the owner of the site. The city gave Dillabough and Arrillaga until Dec. 14 to remedy all necessary problems.
If the problems persist over a significant period, the fines could eventually reach as high as $500,000.
The efforts aren’t enough, however, in the view of Rachel Roberts, deputy director of code enforcement, according to posted meeting minutes.
“The property owners have taken steps to try and maintain the property,” the minutes stated in the summary of the assessment by Roberts. “They need to do something with the site. Code Enforcement can’t continue to have a vacant building for months on end.”
The problems are widespread throughout downtown San Jose, Dillabough told this news organization.
“Something needs to be done about all the vacancies downtown,” Dillabough said. “There are probably 90 vacant sites in downtown San Jose. Our goal is to make this a more vibrant and safe downtown.”
San Jose officials have yet to force a final remediation of many other blight problems elsewhere in the city, including downtown.
One particularly notorious site of downtown blight is an abandoned historic church that’s next to St. James Park. An affiliate of China-based developer Z&L Properties owns the church at 43 East St. James St. The church blight has lingered for years without a fix.
“We hope that a new CEO of the San Jose Downtown Association can help fix these problems,” Dillabough said in an interview with this news organization.
In late November, the Downtown Association named Brian Kurtz as its new chief executive officer, putting Kurtz in a key role to influence downtown economic development.
Dillabough hopes that Michael Lomio, downtown manager for the city of San Jose, will be able to coordinate with the new top boss at the Downtown Association.
“Michael Lomio is doing a great job for the city,” Dillabough said. “We need a better partnership between the city and businesses downtown.”