SAN JOSE — A court-ordered receiver has begun efforts to sell — and construct — chunks of the Bay Area real estate empire cobbled together by a bankrupt developer who is linked to a federal securities fraud case.
The Bay Area properties that are slated for sales or construction were originally proposed or developed by Sanjeev Acharya and the company Acharya heads, Silicon Sage Builders. The Securities and Exchange Commission has accused Acharya and Silicon Sage of fraud. Silicon Sage has been shoved into court-ordered receivership.
Silicon Sage projects and properties in San Jose, Fremont, Santa Clara, Sunnyvale, Morgan Hill, and Hayward face varied futures, according to records on file with the U.S. District Court in San Francisco.
The fate of these projects could have important impacts on the cities where they are located.
In some instances, such as an apartment complex in downtown San Jose, they are developments in high-profile areas.
In other cases, completion of the projects would add badly needed housing to the community — but the housing is being held up because the projects are only partially completed or lack other vital components.
The court has appointed David Stapleton as a receiver to handle, operate, and dispose of the Silicon Sage properties in an effort to raise cash to pay off creditors and possibly investors in the bankrupt development firm, at least to some unspecified extent.
What appears to be the most straightforward disposition of a Silicon Sage property is a 101-unit apartment complex at 180 Balbach St. in downtown San Jose, according to an initial status report from the court-appointed receiver.
“Balbach is a fully-built apartment building located in San Jose,” the court papers stated. “The receiver has engaged a broker and the property is currently listed for sale.”
The complex of apartments for rent is located near San Jose’s convention center and the trendy and vibrant South First Area, or SoFA district.
The receiver said it’s negotiating with the lender on the Balbach apartments complex.
“It appears there is approximately $41 million of debt on this project between the secured lender and other liens,” the receiver said of the Balbach complex. “The receiver’s goal is to sell the project, minimize additional interest and default interest and maximize the recovery for the investors.”
Other court endeavors related to Silicon Sage could be more complex.
The Almaden, a 91-unit project of condominiums for sale is partially completed, and is located at 1821 Almaden Road in San Jose, court and Silicon Sage Builders records show.
“A number of units are already under contract, in compliance with the loan agreement with Acres,” the court papers stated. The receiver said that it intends to sell the remaining condominiums in the development as sales opportunities arise.
The receiver is working with Acres Capital, the construction lender for The Almaden, to push forward with the project, complete the construction, and sell the units in the development. Acres Capital has provided $41 million in financing and some investors have provided $1.8 million for the project.
“The estimated cost to complete construction is from $15 to $17 million” for The Alamden development, the court papers stated.
In Fremont, Savant at Irvington, a 93-unit complex of condominiums for sale, is also under construction and is further along towards completion than is the case with The Almaden in San Jose. The court records indicated that the receiver is attempting to make arrangements to complete the construction.
“The receiver has determined that there is approximately $45 million in secured debt in favor of Acres Capital,” the court papers state. “The estimated cost to complete construction on this project is about $6 million to 8 million.”
In the cases of big residential projects that Silicon Sage had proposed for east San Jose, it appears the receiver will attempt to sell the development sites, but the effort could be extremely involved in both instances.
Sunset at 2101 Alum Rock Ave. is a 796-unit mixed-use residential and retail project. The challenges here are that Silicon Sage has only purchased two of several parcels needed for the full development site.
The receiver is working with real estate brokers to determine if a buyer is interested in purchasing all of the sites needed to develop the 2101 Alum Rock project. San Jose city officials have yet to approve the project.
Little Portugal Gateway at 1663 Alum Rock Ave. is a 121-unit residential complex that has received full city approval.
Silicon Sage has bought only one of two parcels needed to launch construction. The receiver hopes to package the two parcels to a buyer interested in completing the 1663 Alum Rock development.
Peralta Centerville Station in Fremont is a project that would consist of 165 apartments at the corner of Peralta Boulevard and Fremont Boulevard. But construction was halted after the site was bulldozed. Fremont officials have given final approval to the development and the receiver has put the site up for sale.
Even the headquarters for Silicon Sage in Sunnyvale are headed for the auction block and a murky future.
“There is significant debt associated with the property and it has been listed for sale,” the court receiver said of the company’s Sunnyvale head offices. “It appears there is $4.3 million of debt on this project. Discussions with the lender are ongoing.”
