SAN JOSE – A real estate company operating in San Jose faces mounting fines on one of its downtown buildings if the company fails to correct problematic conditions such as a collapsed roof.
The building at 98 East San Salvador St. is owned by a subsidiary controlled by real estate executives Gary Dillabough and Jeff Arrillaga, who are active in redeveloping and revitalizing the downtown area.
Urban Community, the real estate company Dillabough and Arrillaga run, wants to raze the building as part of a project to develop eye-catching residential towers on and near the site. However, construction has not yet started.
The building remains vacant for now and its roof has collapsed, according to city officials and this news organization's review of Google aerial maps of the property.
Dillabough and Arrillaga, city code clerks, appeared before the San Jose Appeals Hearing Board on Nov. 13 to discuss the situation at 98 East San Salvador and other locations owned by the property managers.
Dillabough and Arrillaga have taken some steps to combat the blight, city officials said.
“They (the property owners) have security guards trying to keep up with the nighttime activity,” according to published minutes of the Nov. 13 Board of Appeals meeting. “They have issues with homeless people coming onto the property and want to make it a better place.”
But officials urged property owners to do more, particularly regarding some significant structural damage at the 98 East San Salvador site.
“The roof collapsed on a property at 98 San Salvador,” the meeting minutes said. “Code Enforcement asked the property owners back in April to conduct a damage assessment so Code Enforcement could work with the fire department to assess the safety of the neighborhood.”
Arrillaga explained during the meeting that he and Dillabough had hired security to keep an eye on the property. They both believe that homeless people are responsible for much of the plague.
“People are walking around with shopping carts, with saws, drills and axes. This place is under attack. … It's exhausting. We're at our wits' end,” Dillabough said. “We've invested over $400 million in downtown to try to improve that. We can go there and paint it and change it every day. And in the morning it will be different again.”
The city council decided to impose a fine of almost $2,700 on the owner of the site. The city gave Dillabough and Arrillaga until Dec. 14 to fix any necessary issues.
If problems persist over a long period of time, fines could eventually reach up to $500,000.
But according to Rachel Roberts, deputy director of code enforcement, the efforts are not enough, according to published meeting minutes.
“The property owners have taken steps to attempt to maintain the property,” the minutes said in Roberts’ assessment summary. “They need to do something with the site. Code enforcement can't leave a building sitting empty for months.”
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 lots in downtown San Jose. Our goal is to make downtown more vibrant and safe.”
San Jose authorities have yet to force a final resolution to many other problems in other parts of the city, including downtown.
One particularly notorious spot for downtown decay is an abandoned historic church next to St. James Park. A subsidiary of China-based developer Z&L Properties owns the church at 43 East St. James St. The church fire has been going on for years without a solution being found.
“We hope a new CEO of the San Jose Downtown Association can help resolve these issues,” Dillabough said in an interview with this news organization.
In late November, the Downtown Association named Brian Kurtz as its new chief executive officer, giving Kurtz a key role in influencing downtown's economic development.
Dillabough is hoping that Michael Lomio, downtown manager for the city of San Jose, can coordinate with the Downtown Association's new top boss.
“Michael Lomio does great work for the city,” Dillabough said. “We need a better partnership between the city and downtown businesses.”