Gilroy
– The gutted shell of a former downtown bank could remain an
”
eye sore
”
for the area, now in the midst of a major redevelopment, as two
real estate companies battle in court.
Gilroy – The gutted shell of a former downtown bank could remain an “eye sore” for the area, now in the midst of a major redevelopment, as two real estate companies battle in court.
Building permits have expired on the property at 7601 Monterey St., at the corner of Fourth Street, and city officials are now mulling the idea of declaring the property a blight. If they pursue that route, they could knock down the three walls, roof and support beams now separated by chain link fence from newly remodeled sidewalks and a freshly paved street.
Just a year ago officials envisioned the project as the last of four major building improvements at the corners of Monterey, Fourth and Lewis streets – the crossroads envisioned as the gateway to a revitalized historic business district.
“Obviously it’s an eye sore for our downtown right now,” Mayor Al Pinheiro said. “There’s no question that this building had all the potential in the world, but unfortunately it’s come out to be a black mark.”
Architects originally planned a two-story commercial building with slate tiles and earth-colored walls. The theme would blend with the Spanish mission-style building erected a few hundred feet away on the corner of Monterey and Lewis streets. But other than basic plumbing and structural work, the building has sat idle due to its involvement in litigation between property owner Vision Quest 21 (a real-estate brokerage formerly known as Su Casa Century 21) and Century 21 Real Estate Corporation.
The latter company has sued Vision Quest 21 and its associated entities and partners for more than $1.6 million in unpaid franchise fees and other funds.
As part of that litigation, Century 21 has obtained a court order that could allow it to seize the downtown Gilroy property and others to recoup its debts, assuming it wins the court battle.
Shawn Parr, an attorney for Vision Quest 21, and David McCain, a principal investor who is listed as an owner of the property in county land records, both declined to comment.
In a March 6 response to a notice of permit violations from the city, McCain told city officials the company was unable to comply with the notice due to the lawsuit with Century 21.
“Our relationship with the city of Gilroy is very important to us as we are considering moving our main office to the building on Monterey (Street),” McCain wrote, “and we would like to work out a solution: however, at this time we cannot afford to correct all the violations listed on your notice and order.”
It remains unclear if and when city officials will invoke the blight ordinance to knock down the building. A six-month extension of Vision Quest’s building permit expired in March, according to Gilroy Code Enforcement Officer Scott Barron. To renew its development plans, the company would have to once again pass through the “plan check” process, when city employees ensure the project meets building regulations.
The longer the delay, the greater the need for revisions to meet changing standards, according to city staff. Delays also mean the project may no longer qualify for a program that frees downtown buildings from hundreds of thousands of dollars in development fees.
The so-called “fee waiver program” has been a major catalyst for the area’s renewal, inspiring more than 20 building projects for the Monterey Street corridor. Some of the first to occur have been at the same intersection as the Vision Quest building: Pinnacle Bank remodeled a brick building on the southwest corner of Monterey and Fourth streets, facing the Vision Quest property; a Spanish mission-style building with businesses and condominiums was erected on the southeast corner of Monterey and Lewis streets; and a similar three-story building with mixed uses is now rising on the northeast corner of Monterey and Lewis streets.
Chris Vanni, a Gilroy commercial real estate broker and investor, said he has heard rumors the Vision Quest building is now on the market and is exploring a bid of about $800,000. But the expired permits, the possibility of losing the fee waivers (the program expires in less than three years), and the legal troubles swirling around the property are a cause for concern.
“It’s not a nice clean deal,” Vanni said. “There’s a lot of stuff we’d have to investigate.”
Downtown developer Gary Walton leases the remodeled property facing the Vision Quest building to Pinnacle Bank, which opened its doors in recent weeks. He has encouraged the city to aggressively pursue abatement of the building.
“What’s not fair about it is that it negatively affects the value of other properties,” he said. “It gives the image of this bombed out, neglected property … We’ve got a negative impression of downtown as it is, and when you see a building like that, it makes it that much harder to convince people to invest.”
The city is allowed to declare a building blighted after it sits idle for six months. No work has taken place at the Vision Quest building for about a year, enforcement officer Barron said.
“We’ve issued them an order to abate their violations,” Barron said, noting that knocking down a building is an expensive project. “We’re debating what to do next.”
Serdar Tumgoren, Senior Staff Writer, covers City Hall for The Dispatch. Reach him at 847-7109 or st*******@************ch.com.
