Blighted housing project site in San Jose defaults on failed financing

SAN JOSE — A site of blight in West San Jose where multiple projects have been proposed flopped into a loan default, raising questions about the property’s development prospects.

Golden Bank, the lender, filed a notice that the property’s owner, an affiliate of Pacific Row Development, defaulted on a $6.7 million real estate loan, documents filed on June 5 with the Santa Clara County Recorder’s Office show.

Pacific Row’s principal executive is listed as Paul Yu, who has locations in Millbrae and San Mateo, state and county business records show.

In 2018, Pacific Row bought the site at 335 South Winchester Blvd. for $1.5 million. An affiliate obtained the loan from Golden Bank in 2021.

Khanh’s restaurant vacated the property in 2021 after it relocated to Campbell.

Blighted conditions soon followed the restaurant’s exit and are now on San Jose’s code enforcement radar. Matters worsened as multiple development proposals failed to materialize in recent years.

The initial proposal for the site envisioned an office building. In 2024, the Pacific Row affiliate pivoted to a 75-unit apartment complex with ground-floor retail.

At the same time that proposal emerged, the property was put up for sale with an initial asking price of $25 million. The price was later cut to $20 million.

At a city appeals hearing board meeting in March, a San Jose code enforcement officer presented a report regarding his inspection of the property. Inspector Manuel Duarte declared that blight still affected it as of March 12.

“Current conditions contained blighted conditions, overgrown vegetation, graffiti, and the presence of solid waste,” according to minutes of the meeting.

In May, a direct observation of the property showed a cyclone fence was in place along part of the perimeter. A chair, pottery, and considerable debris were left unattended next to the empty and boarded-up building.

At least one resident of the area reported to the appeals hearing board that the property remains a site of blight.

“Neighbor Chris Giangreco noted that the subject property continues to be a blight problem and an attractive nuisance,” the meeting minutes stated.