San Jose housing project site faces foreclosure even after property deal

SAN JOSE — A prime property near San Jose’s two mega malls could be auctioned off within weeks even though the site landed a new owner last fall, Santa Clara County real estate records show.

The development site is located at 395 South Winchester Boulevard in San Jose and is near Westfield Valley Fair Mall and Santana Row.

Santa Cruz County Bank warns it might attempt to auction off the property or seize the site through a foreclosure proceeding, according to documents filed on Jan. 8 with the County Recorder’s Office.

An auction and foreclosure looms over the site because a $3 million loan that Santa Cruz County Bank provided for the property in 2020 has tumbled into default and delinquency.

In October, a Fremont-based investment group paid $4.8 million to buy the property from a group led by San Jose-based real estate investor Fred Mayer. The property is across the street from Santana Row, a destination mixed-used restaurant, retail, office, housing, hotel and entertainment center.

In 2019, the Fred Mayer-led group, which operated as Century Tower LLC, paid $5.5 million for the site. About a year later it obtained the loan from Santa Cruz County Bank that went into default.

Santa Cruz County Bank is still threatening to pursue an auction of the property and foreclosure of the loan even though Century Tower LLC, which is headed up by Mayer, had sold the property.

Mayer’s group had proposed a 16-unit housing development that would replace a commercial building on the property.

The residential project has yet to be built, however. Dr. Ming Li’s Flute Studio and Robert’s Piano Service operate on the site, according to Google Maps.