San Jose hotel project site heads towards auction and foreclosure
SAN JOSE — The site where a hotel is slated to be developed in San Jose is headed for a real estate auction and possible foreclosure of a delinquent loan, Santa Clara County property records show.
The proposed hotel development — approved by the city but never built — is located in north San Jose’s Alviso district near the Topgolf entertainment, dining and golfing complex.
In 2019, the city granted final approval to the project, which would be a 200-room hotel at 7 Topgolf Drive, San Jose planning documents show.
Now, however, the project’s future has tumbled into limbo, at best. Instead of construction starting on the hotel, the next major event for the development site appears to be a public auction scheduled for mid-April.
A South Korea-based company, operating as Mirae-San Jose, bought the 3.2 acres of land for the hotel site in 2019, paying $22.5 million for the land, county public files show.
At the time of the purchase, the real estate group also landed a loan of $26.4 million provided by Pine Tree Specialized Private Investment Trust and KEB Hana Bank.
The lenders reported that the loan was in default in October 2022, according to the county documents. At that time, the total owed, including interest, late fees and penalties, had swelled to $34.4 million.
The coronavirus outbreak descended on the worldwide economy in 2020, the year after the South Korean firm bought the hotel land and obtained the financing package that’s now in default.
The economic fallout from the deadly bug has jolted the travel and hotel markets worldwide, including in the Bay Area. Hotel occupancy levels have withered in the wake of the coronavirus.
Three years after the onset of the coronavirus, a brand-new hotel in north San Jose would appear to face murky prospects.
The highest-profile new development in the area is the bustling and popular Topgolf San Jose complex, which opened in 2021.
Topgolf has been a steady draw as an entertainment, sports, and dining center. Topgolf operates high-tech driving ranges that allow people to hit golf balls equipped with microchips that record distance and accuracy. The venues typically also include dining and drinking establishments.
Despite owning the land at 7 Topgolf Drive for more than three years, the Mirae-San Jose group has yet to begin construction on the 200-room hotel.
The lending group could oblige the borrower to repay the loan in full to avoid foreclosure and seizure.