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Downtown San Jose housing tower is still eyed despite VTA seizure plan

SAN JOSE — A downtown San Jose housing highrise that would provide homes for average workers is still being actively planned despite a transit agency’s legal quest to seize the site for the project, a developer says.

The site, consisting of two parcels with addresses of 17 through 31 E. Santa Clara St. in downtown San Jose, is the location where a developer intends to build a 26-story housing tower with 200 homes.

The Santa Clara Valley Transportation Authority has filed lawsuits in an effort to seize the sites needed for the development of the Eterna Tower, whose units are expected to include dozens of affordable residences.

The VTA is using a process called eminent domain to gain possession of the parcels, which the transit agency says it requires as part of a mammoth project to extend BART to San Jose’s Little Portugal area, downtown San Jose, and the Diridon train station.

“I disagree with the VTA’s conclusion that it needed to file an eminent domain” on the properties required for the housing tower, Loida Kirkley, principal executive with Roygbiv Real Estate Development, which is developing Eterna Tower.

The legal team for Roygibiv Real Estate is already engaged in negotiations and discussions with the VTA regarding the project site.

“Unfortunately, the VTA’s offer is too low,” Kirkley said.

An affiliate headed up by Kirkley owns one parcel that the VTA is attempting to seize at the location, a property with addresses of 19 and 25 E. Santa Clara St.

In 2020, a Roygbiv Real Estate Development paid $3.4 million to buy the 17 through 25 E. Santa Clara property.

The adjacent parcel, with addresses of 29 and 31 E. Santa Clara, is owned by a group operating as Z Hanna LLC, court papers show. Lars Fuller, an individual, is the provider of an existing mortgage on that property.

One major problem with the VTA approach to attempting to seize the properties, in Kirkley’s view, is the transit agency might be impeding the development of a considerable amount of affordable housing in downtown San Jose.

“What I do not understand,” Kirkley said, “is why VTA has made it practically impossible for Roygbiv Real Estate Development to build affordable housing near the future BART station that is funded by taxpayers’ money.”

Kirkley’s group has also proposed the development of a housing tower around the corner on North Second Street that would provide affordable residences for seniors.

The transportation authority stated in the court papers that the parcels, along with properties in the downtown and east of the downtown, are crucial sites that the agency needs for its BART extension.

“VTA seeks to acquire the property for the development, construction, operation and maintenance of the VTA’s BART Silicon Valley Phase Two Project,” the agency stated in court filings related to the eminent domain proceeding against the sites on East Santa Clara Street.

The extension itself is a vital link in BART expansions throughout the region, the VTA asserts.

“The project will be the single largest public infrastructure project ever constructed in Santa Clara County,” the VTA stated in the court filing.

By 2040, an estimated 54,600 people are expected to ride in the extension section, the VTA estimated.

DCI Engineers, in an April 2022 report, evaluated the feasibility of the construction of housing towers next to the proposed entrance to the downtown San Jose BART on East Santa Clara Street.

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