Politicians Object to Smaller Flea Market Plans in San Jose

A plan by the owners of the San Jose Flea Market to use the builder’s remedy to scale back its redevelopment and housing plan has enraged local and state elected officials.

Three Silicon Valley politicians object to a plan by the Bumb family to use the legal loophole meant to boost home construction to slash the number of homes proposed at 1590 Berryessa Road, the Silicon Valley Business Journal reported.

Late last month, the owners of the 61.5-acre market filed plans to downsize its redevelopment to 940 homes, from as many as 3,450 the family and City Council envisioned two years ago. In February of last year, the approved site was listed for $300 million.

The proposal was filed under the builder’s remedy, a provision that streamlines project approvals that contain affordable homes when a county or city such as San Jose fails to certify its state housing plan.

San Jose Mayor Matt Mahan, District Four Councilman David Cohen and State Assemblyman Alex Lee each accused the Bumbs of perverting the spirit of the law.

To accommodate future growth, San Jose counts on more transit-oriented development, where housing and jobs are near a transit stop, Mahan said in a statement. To spur that kind of development in Berryessa, billions of dollars are being spent to extend BART there and to Downtown San Jose.

The Bumbs’ new plan undermines that goal, he said. And using the builder’s remedy to scale back planned housing is “a gross manipulation of the law, running counter to the legislature’s intent to encourage an adequate housing supply,” Mahan said in a statement.

“We cannot allow current poor, possibly short-term economic conditions (to) change term development plans at a key strategic site in San Jose,” Cohen added in a statement posted to his website.

The city’s Planning Department disclosed that out of 19 builder’s remedy proposals, eight projects aim to reduce the number of housing units. Cohen estimates that 5,000 housing units could be lost as a result.

The flea market project, dubbed Market Park, would scrap 1.5 million to 2.3 million square feet of offices once planned to replace the flea market founded in 1960 by George Bumb Sr. on a former farm.

Instead, the business led by Brian and Thomas Bumb have proposed using the builder’s remedy to automatically approve 451 townhomes, 399 apartments and 90 condominiums, according to the San Jose Mercury News. Some 20 percent of the units would be affordable.

The revised development would also include 45,000 square feet of shops, an urban market, a 5-acre plaza and open space not far from the Berryessa BART station.

Erik Schoennauer, a land-use consultant and representative of the Bumbs, blamed San Jose for not having a state-approved housing plan for 62,200 new homes to be built by 2031.

“The ‘spirit’ of the builder’s remedy is quite simple,” Schoennauer told the Business Journal. “If the city doesn’t propose an effective housing plan, then the state and the market will decide.

“This new proposal will right-size the amount of commercial space to match market demand,” he said.

The Bumbs change of plans has upset local and state officials, who have little recourse under state law.

For Lee, the local assemblyman, the Bumbs’ decision to invoke the builder’s remedy to downsize their development was “unanticipated” and “incredibly short-sighted.”

While state lawmakers aren’t considering any legislation yet to address the unintended consequences of the builder’s provision, he said, news of how the Bumbs are using the provision for the flea market redevelopment has spurred conversations among pro-housing legislators.

“This is alarming,” Lee told the Business Journal. “Especially after all of the heartbreak and painstaking negotiations the owners, the city and flea market vendors had to go through. It would be a huge disappointment if at the end of all of that, all we got was another block of townhomes or a strip mall that blends in with everything else.”

— Dana Bartholomew