GILROY
– The city and a 60-year local resident can’t agree on a price
for his boarded up Chinese restaurant downtown, and on Tuesday, the
City Council will consider taking him to court to force him to
sell.
GILROY – The city and a 60-year local resident can’t agree on a price for his boarded up Chinese restaurant downtown, and on Tuesday, the City Council will consider taking him to court to force him to sell.
A vintage neon sign still advertises chow mein, steaks and chops to all who pass by 7347 Monterey St., next to the Salvation Army Thrift Store. Loi Dong, still spry at 83, bought the property some 40 years ago and ran the Leyon Restaurant there until about nine years ago, when extensive water damage forced him to close it down.
To city officials, the vacant former eatery is sitting on the future site of an art gallery and garden, part of a cultural and performing arts center for all Gilroyans to enjoy. A community theater would be the centerpiece of this long-planned complex, which would take up the half block of land north of Seventh Street between Monterey and Eigleberry streets.
Dong is the most obstinate of five property owners standing between the city and this dream. The city already has agreed on a price with the Oyao family to buy two houses and their lots on Seventh Street, and it is still negotiating with the Benson family for the lot occupied by the El Grullense taco stand, the Salvation Army for its thrift store lot and the Gera family for two lots next to Dong’s.
But the city’s hired negotiator Lance Gilbert of the Kansas-based Universal Field Services, has reached an impasse with Dong. If the Council follows city staff’s recommendation, the city would adopt a resolution of necessity, the first step in the lengthy eminent domain process.
If the city can prove its need for Dong’s lot and neither side backs down, a judge would ultimately decide a fair market price and force Dong to sell. Nevertheless, “There’s many opportunities for this to be settled along the way,” said Bill Headley, the city’s development manager for facilities and parks.
Dong said he would be happy to sell for a fair price, but he thinks the city’s offer of $97,000 is ridiculously low. He said he knows for a fact the city is paying $310,000 for the two old houses on Seventh Street.
“My building is better than these two,” Dong said Thursday afternoon. He also said he knows that other restaurants downtown recently have sold for around $250,000.
“I don’t cheat the city. After the city pay(s) me the fair price, I (will be) happy.”
In a letter to the city, Dong said he thinks his property is worth between $380,000 and $410,000.
“Mr. Dong is certainly entitled to his feeling, but we have to go by … market value, and he has a different opinion of what that is,” Headley said.
There is no doubt that the building is in bad condition. The county has assessed the property at $37,000: $23,000 for the lot and a mere $14,000 for the structure – a pittance by Santa Clara County standards.
As for Dong’s claim that his commercial property is worth more than the residential sites on Seventh Street, which the city is buying from the Oyao family, Headley said it is simply wrong.
“There’s no comparison,” Headley said. “You’re not comparing like properties. … They’re not even the same zoning category.”
Dong, with his smooth and swift movements, looks nowhere near his age. A native of China and a naturalized U.S. citizen, he immigrated to San Francisco, served in the Air Force during World War II and moved to Gilroy in the 1940s. He and his late wife, Leung, bought the downtown property in the 1960s and opened the Leyon Restaurant there. Leung died the same year the restaurant closed, three decades later.
“(It was) a hard year for me,” Dong said.
The cause of its closure had a lot to do with a tree the city had planted long before in front of the restaurant, Dong says. The tree’s roots clogged the storm drain coming down from the restaurant’s roof, causing rainwater to accumulate on the roof and leak inside.
Dong claims he still lives in the secondary building behind the restaurant, but the only address the city has for him is on Eigleberry Street – his daughter’s house, he says – where a reporter found him Thursday. Headley said Dong has not supplied documentation to the city that he lives on the former restaurant property.
If Dong does live there and can prove it, the city would have to raise its offer for his property. Under eminent domain, Dong has a right to receive fair market value for his property plus any money needed for relocation.
Dong said there is no way he could buy anywhere else to live for $97,000. For that price, he’d rather keep his old abandoned restaurant.
“I still like my building,” Dong said. It’s still solid, he added, noting its steel-reinforced concrete foundation and earthquake-proof construction.
But that would foil the city’s vision of a downtown arts center, a vision the Council may be willing to go to court to defend. Dong’s property “is a major Monterey frontage piece, and it would be a serious concern for Council if we can’t buy it,” Headley said.
Dong doesn’t like the notion of paying an attorney for the eminent domain battle, but he may be willing to do it to keep from getting “ripped off.”
The city has set aside $3.2 million for land purchase when they established the arts center site this past summer. At that time, it was said that construction would begin in 2008 and end in 2010, with design planning starting in the next two to three years. All this would be funded by park development impact fees the city collects from developers.
Staff Writer Eric Leins contributed to this report
