SAN JOSE — A San Jose hotel development site with potentially hundreds of rooms has tumbled into loan defaults and faces foreclosure.
As currently approved, the proposed hotel could bring 200 rooms to the Alviso neighborhood of north San Jose, according to plans submitted to city officials. The hotel would also include 15,400 square feet of retail.
This development project is currently in progress. The lender filed a notice of default against a loan secured by the land on which the hotel was to be built, according to documents filed with the Santa Clara County Records Department on Oct. 26.
The South Korea-based company, which operates as Mirae San Jose, purchased 3.2 acres of land for a hotel site in 2019 and paid $22.5 million for the land, public county files show.
Pine Tree Specialized Private Investment Trust and KEB Hana Bank provided Mirae San Jose with a $26.4 million loan for the land purchase.
The lending consortium now claims that Mirae Real Estate Company owes $34.4 million in delinquent loans. Large amounts of debt arise from factors such as interest and late fees.
Pine Tree Specialized and KEB Hana Bank have threatened to seize land title through foreclosure proceedings, according to county records.
Lending groups can require borrowers to repay loans in full to avoid foreclosure or foreclosure.
The 2020 coronavirus outbreak has shocked travel and hotel markets around the world, including the Bay Area.
As a result, hotel occupancy rates are plummeting in the region and around the world. The economic aftermath of COVID-19 has made building new hotels impractical.
The site of the hotel currently under threat of foreclosure is one of two proposed hotels nearby.
A planned 214-foot hotel on six acres nearby is owned by another group and has nothing to do with the default accommodation.
The area’s most high-profile new development is the bustling and popular TopGolf San Jose Complex, opening in 2021.
Topgolf is a consistently popular entertainment, sports and dining center. Topgolf operates a high-tech driving range where you can hit golf balls with microchips that record distance and accuracy. Venues usually also include food and beverage outlets.
Despite owning 3.2 acres of land at 7 Topgolf Drive for over three years, the Mirae San Jose Group has yet to begin construction on the 200-room hotel.
San Jose officials gave final approval to the hotel in 2019, about a month before Millet Group purchased the land.