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SAN JOSE – A default rocked a San Jose project proposed by bankrupt developer Sanjeev Acharya and his company Silicon Sage Builders, creating more financial challenges for Acharya, who is at the center of allegations of securities fraud.
A lender has filed a notice that a delinquent loan could trigger foreclosure on Silicon Sage Builder properties at 2149 Alum Rock Ave. in eastern San Jose, according to documents filed with Santa Clara County officials.
Acharya and Silicon Sage Builders have shaped a Bay Area real estate empire that appears to have collapsed under the pressure of multiple issues. The difficulties include high-profile fraud allegations filed by the Securities and Exchange, Acharya’s Chapter 11 bankruptcy filing and an array of defaults for a growing number of the company’s properties.
In one of the latest challenges, a lender claims that a subsidiary controlled by Acharya and Silicon Sage Builders defaulted on a loan totaling $ 5.98 million, according to public records filed on February 24.
The property subject to foreclosure proceedings is part of a site where Silicon Sage Builders had proposed the development of 796 homes and 30,000 square feet of retail and restaurant space in a large development for use. mixed at 2101 Alum Rock Ave. in San Jose.
In the SEC fraud case, filed in U.S. District Court in San Francisco, Federal Judge Susan Ilston authorized a receiver to take control of the properties and operations of Acharya and its company Silicon Sage Builders .
According to the SEC complaint, around 250 people who paid around $ 119 million to invest in projects launched by Acharya and Silicon Sage Builders risk being defrauded through a financial network woven by the real estate developer.
In January, Acharya filed for bankruptcy in an attempt to reorganize his finances.
Among the notable debts listed in the bankruptcy filing:
– $ 45 million for a construction loan related to a property at 42183 Osgood Road in Fremont. New York-based Acres Capital through an affiliate has been listed as a lender.
– $ 40.7 million for a construction loan related to a property located from 1821 to 1873 Almaden Road in San José. Acres Capital provided the financing.
– $ 39.6 million for a construction loan associated with a site on Balbach Street in downtown San Jose. Silicon Sage Builders developed and completed a residential complex at 180 Balbach called Aura. Chicago-based Prime Finance Partners was listed as the loan provider.
– $ 13.9 million for a land loan at 37358 at 37482 Fremont Blvd. in the Centerville district of Fremont. Bolour Associates, based in Beverly Hills, is listed as a lender.
– $ 8.3 million for a land loan at 41965, 41911 and 42021 Osgood Road in Fremont. Bolour Associates provided the loan.
– $ 7.9 million for a construction loan and a land loan for a site at 1313 Franklin St. in Santa Clara. Bolour Associates is listed as a lender.
– $ 5.98 million for a land loan at 2101 at 2149 Alum Rock Ave. in San José. Parkview Financial, based in Los Angeles, is listed as a lender.
– $ 4.9 million for a mortgage at 510 at 528 S. Mathilda Ave. in Sunnyvale. Bolour Associates is the lender.
– $ 3.6 million for a land loan at 1368 El Camino Real in Santa Clara. On January 11, lenders began foreclosure proceedings to foreclose the property through a notice of default on a $ 3.5 million loan in arrears. The loan is for the office and retail section of the property, which has been constructed and is known as Madison Park.
– $ 2.9 million for a construction loan at 560 S. Mathilda Ave. in Sunnyvale. Acharya’s main company, Silicon Sage, is headquartered there.
– $ 1.8 million for a land loan at 1661, 1663 and 1665 Alum Rock Ave. in San José.
Parkview Financial REIT, the lender of 2149 Alum Rock in San Jose, said the borrower defaulted on a loan issued in September 2020.
The September timeline would appear to be interesting as Acharya secured this loan after previously admitting to investors that they had made mistakes over the years in the way he had run his real estate empire. In meetings with investors around August 2020, Acharya appeared to acknowledge that he had made mistakes over the years, according to documents filed by the SEC.
Acharya said he should have been more transparent with investors, the SEC fraud complaint said.
“I should have done it,” Acharya said at an investment meeting. “At the time, maybe I thought everyone’s feedback would come. So… I really didn’t bother to go into the details, but what I wasn’t thinking, my mistake, was that I wasn’t thinking of a pessimistic scenario.
Silicon Sage and Acharya painted an overly rosy picture of the outlook, outlook and financial strength of the company’s range of projects, according to SEC claims.
“Since at least August 24, 2016, Silicon Sage Builders and all of its real estate development projects except one have not been profitable,” alleges the complaint of the SEC.
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