FREMONT — For many years, Fremont leaders and business advocates have hoped to see the core of the city’s Centerville district get a facelift, and in 2017 it seemed that day would come.
A developer, SiliconSage Builders, stepped up then with a proposal to replace a whole block of low-slung, 1970s-era buildings with 93 apartments, 72 townhouses and about 25,000 square feet of ground-floor retail.
SiliconSage secured all the right approvals from the city — including a controversial one for demolition of a historic, decommissioned fire station. Last fall, it pushed out businesses and leveled the block of buildings along the east side of Fremont Boulevard between Parish Avenue and Peralta Boulevard.
All the wheels were in motion and fingers crossed that the redevelopment would spark a long-awaited renaissance of the area as owners of nearby properties such as the long vacant theater building across the street would follow suit.
But by late December all work came to a screeching halt with news that SiliconSage was the subject of a $119 million fraud investigation by the federal Securities and Exchange Commission.
The commission alleges that SiliconSage CEO Sanjeev Acharya duped hundreds of investors into falsely believing his business was successful and profitable.
In January, Acharya filed for bankruptcy, hoping to reorganize his company’s finances, all while lenders began foreclosure proceedings on several properties owned by affiliates he controls.
“It’s disappointing,” Councilman Raj Salwan said in a recent interview.
The web of legal and financial challenges Acharya is facing make it unlikely that SiliconSage will be able to deliver the big Centerville project, city officials acknowledge.
And that means residents may be staring at a vacant lot there for some time.
“This is kind of a crucial part for Centerville, between Peralta and Parish,” Salwan said. “It was kind of a hope that we would have somebody who could assemble the land and pull everything together and kind of create this catalyst project for the community.”
“This will certainly set back the progress of revitalizing the Centerville business district,” Councilman Yang Shao said.
In an email to this news organization, planning director Joel Pullen said the city-approved entitlement to develop the area as planned “is good through September of 2022,” so someone else can come through to move it forward.
“We still believe in this being a highly desirable and attractive opportunity,” Mayor Lily Mei said in an emailed statement.
“I think people will be lined up to take this opportunity. This is a good project, it’s a great location,” Salwan agreed. “And I think, depending on whether there is a fire sale, someone might be able to pick it up for a good value.”
Acharya and SiliconSage claimed in court filings that the SEC is unfairly attempting to liquidate the company and the complaint against them represents a “rush to judgement.” Acharya did not respond to multiple calls, emails and text messages seeking comment for this story.
This is not the first time something like this has happened in the city, let alone Centerville. In 2000, the city spent $13 million through its former redevelopment agency to acquire and clean up land down the road at Fremont Boulevard near Thornton Avenue, forcing out a popular hobby shop to make an envisioned mixed-use development possible.
For more than a decade, the city tried to partner with developers to build a mix of apartments, townhouses, senior housing, upscale restaurants and a supermarket, but the plan never took off.
The city eventually sold off the rights to a Danville-based developer who built Artist Walk, a mixed-use development with 185 apartment units that opened in 2017.
Salwan said the city should be proactive about ensuring the stalled Centerville project gets completed.
“As soon as we get the word that it’s for sale, we should let all the developers and brokers and everybody know that this is out here,” Salwan said.
Unlike the Centerville project, which hasn’t seen a single nail driven into wood, SiliconSage has almost finished Savant, a 93-condominium project at 42111 Osgood Rd. The website for that development currently isn’t functioning.
SiliconSage also had preliminary plans for building hundreds of condominiums and apartments at two other nearby properties on Osgood Road, according to city reports.
But SiliconSage’s projects aren’t the only ones stalled in the city because of legal or financial troubles facing developers.
The Mission Hills Square development near Interstate 680 and Auto Mall Boulevard, which is supposed to feature almost 55,000 square feet of retail and office space and 158 condominiums, stalled indefinitely in the middle of construction because of bankruptcy, mortgage default and two federal legal cases involving that property’s owners and developers.
The building permit for that project, currently controlled by Gadsden Properties of Arizona, was issued in July 2017 and will expire next month if the owners “don’t call for an inspection or successfully request an extension for the permit,” Pullen said.
“We have been contacted by various parties considering taking over construction to finish the project,” Pullen said.
“It seems like we got burned twice,” Shao said.
“This is a huge issue, developers that are building and not able to fulfill their promise,” Salwan said.
Aziz Omar, the owner of De Afghanan Cuisine restaurant and De Afghanan Kabob House, both located across the street from the SiliconSage Centerville project lot, hopes the issue gets resolved soon.
Omar said his business has lost some foot traffic since the buildings across the street went down, and now on windy days the dirt from that empty lot blows onto his businesses’ doorsteps.
He wants the city to do a better job of keeping up the lot in the meantime and see the development through.
“Hopefully somebody will be able to complete the plan,” Omar said.