February 26, 2024
City is now considering upping penalty cap for neglectful property owners to $500K

A China-based property owner behind a downtown San Jose church that’s been sitting in significant disrepair for years could end up getting an eye-popping bill from the city.

Z&L Properties, which owns First Church of Christ, Scientist at 43 East St. James St. and whose principal executive is mired in a bribery scandal, has already racked up around $85,000 in penalties for allowing the century-old house of worship to languish. But city leaders say Z&L is still sitting on their hands, despite repeated outreach.

Now, San Jose is considering upping its penalty cap for neglectful property owners, from $100,000 to half a million dollars, with the hopes that it compels Z&L to fix up the site. The city is also considering ways to take over the property — though officials said that may be legally complicated.

“Behind me is a symbol of negligence that will no longer be tolerated in the city of San Jose,” said Mayor Matt Mahan on Thursday standing outside of the church. “What is a beautiful, historic landmark has become an eyesore.”

The Neoclassical-style church was first built in 1905 and then vacated in 1975, sitting empty since then. It was bought in 2017 by Z&L, which then covered the church in scaffolding with plans to revamp the site. But today, winds billow through the ripped white and black plastic wrap that envelops the building, a chainlink fence surrounds the weed-filled property and an RV sits parked behind the church.

The partially covered First Church of Christ, Scientist building is seen during a press conference, where San Jose Mayor Matt Mahan announced plans to up the maximum amount of fines for negligent property owners, on Thursday, Aug. 24, 2023, in downtown San Jose, Calif. (Dai Sugano/Bay Area News Group) 

Z&L, a real estate firm that is based out of China and that has a Fremont-based office, was unable to be reached for comment. A phone number was listed as out of service.

“My office (and) my team has been flooded with emails and with calls about what our constituents call the ‘trash bag church,’” said Councilmember Omar Torres, who represents the city’s downtown neighborhood, during Tuesday’s press conference. “I will not allow for this significant, historic property to deteriorate. We are giving our residents false promises about our abilities to address significant blight issues in our city.”

Ben Leech, executive director of the Preservation Action Council of San Jose, said there are many ways the city could reuse the church as a way to revitalize the St. James Park area. Though the building has been sitting dormant for years, the structure hasn’t been heavily damaged from water or mold, according to Leech.

“A performing arts center, movie theatre, church, community center, museum, night club, restaurant…it really could be anything,” said Leech in an interview. “We would be encouraging some sort of community-serving space. (There are) Two questions: What is the best use of this building? And what is the most profitable use of this building? We hope there’s a happy medium.”

The proposal, which will go before the Rules Committee on Aug. 30, is the second time the mayor has tried to pressure property owners to clean up their buildings. In June, Mahan said the code enforcement department will be conducting proactive searches of blighted properties in downtown. Instead of residents submitting complaints about rundown buildings, the power is instead being given to code enforcement officers.

The church is just one of Z&L’s purchases over the years in downtown San Jose and San Francisco — and marks a pattern of struggling real estate projects. The firm sold a 1.6-acre property in 2021 near the corner of Terraine Street and Bassett Street — and plans for a large residential building there have stalled.

San Jose Mayor Matt Mahan, left, speaks, as Councilmember Omar Torre looks on, in front of the partially covered First Church of Christ, Scientist building during a press conference, where he announced plans to up the maximum amount of fines for negligent property owners, on Thursday, Aug. 24, 2023, in downtown San Jose, Calif. (Dai Sugano/Bay Area News Group) 

The company also has failed to build a highrise it had planned for at the old Greyhound station on 70 South Almaden Ave. in downtown — and recently put the property up for sale.

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So far, the company has only been able to complete one Bay Area project: two residential towers near San Jose’s San Pedro Square. But only one building is open for residents.

Further legal troubles have hit the real estate firm. In December 2022, Z&L Principal Executive Zhang Li was arrested in London after U.S. prosecutors brought bribery charges against him in connection with a San Francisco development project.

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