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City Manager Issues Statement on Eminent Domain Proceedings for David’s Banquet and Meeting Facility in North Santa Clara

Post Date:12/12/2018 3:34 PM

 FOR IMMEDIATE RELEASE: Wednesday, December 12, 2018

CONTACT: Lenka Wright, Director of Communications, 408-615-5515 or lwright@santaclaraca.gov

 

Statement from City Manager

“Given the numerous media inquiries concerning the City Council’s action Tuesday night on acquiring the leased City of Santa Clara-owned site David’s Banquet and Meeting Facility through eminent domain proceedings, the City is providing facts and background concerning this matter,” said Deanna J. Santana, City Manager.

Background

  • The property, located at 5131 Stars and Stripes Drive, is City-owned. The land already belongs to the City. Recent references to taking the land of David’s Banquet and Meeting Facility (David’s Banquet) are incorrect.
  • The City has been working with the lease holder, DE II Restaurants, Inc., for more than six months to resolve this matter. Unfortunately, settlement has not been successfully achieved.
  • On October 5, 2018, the City made an offer to acquire the leasehold interest in accordance with the requirements of Section 7267.2 of the Government Code. The offer of $5,000 represented the value of the leasehold interest as determined by an independent state licensed and certified appraiser.
  • In addition, DE II Restaurants, Inc. has not secured an alternate appraisal by an independent, state-licensed and certified appraiser to demonstrate the leasehold interest is worth more than the City’s appraisal of $5,000 and has not provided Associated Right of Way Services, which is the requisite information necessary to move forward with an analysis to determine the loss of business goodwill.
  • While the City Council adopted the resolution to proceed with eminent domain, the City can also concurrently continue to negotiate a settlement with DE II Restaurants, Inc., provided that the Lessee completes the required actions to demonstrate a higher leasehold value than the City’s appraisal.
  • The City is providing DE II Restaurants, Inc. with relocation assistance in the hope that the business can be relocated to an alternative location. Moving costs would be paid by the City.

David’s Banquet and Meeting Facility

  • David’s Banquet operates under a 20-year lease, which went into effect in November 1999. The lease is due to expire on Oct. 31, 2019, with two 5-year options.
  • The lease provides that the City would construct the building on City-owned land and provide essentially a turnkey facility with City-provided fixtures and equipment that would allow the Lessee to operate the facility. 

Public Purpose and Necessity

  • CityPlace Santa Clara is a phased development of approximately 240 acres on City-owned land that includes a new urban center with a retail, hotel and entertainment district, office development and residential uses located in close proximity to Levi’s Stadium and the City’s Convention Center north of Tasman Drive. 
  • The 240-acre project site is comprised of what is currently being used at the Santa Clara Golf & Tennis Center; David’s Banquet Facility; Fire Station #10; Parks Maintenance facility; PAL BMX and vacant land.
  • As approved, the project would include the construction of medium- and high-rise buildings up to 17 stories in height and with a maximum of 9.16 million gross square feet of overall floor area for all uses, excluding the floor area of associated parking structures.
  • The City will be constructing public roads and related infrastructure necessitated by the CityPlace Project.
  • The City is seeking to demolish the site where David’s Banquet is located in order to move Stars and Stripes Drive about 100 feet north and allow for the development of Avenues A, B and C.
  • Stars and Stripes Drive must be relocated in order to provide better circulation to and from Great America Train Station and Tasman Drive. In addition, the new Stars and Stripes Drive will be elevated approximately 15 feet higher than its current condition in order to allow the City to install the appropriate public infrastructure to service the CityPlace project. Because of the landfill, none of the infrastructure can be built below ground. Therefore, infrastructure will be built above the existing landfill, causing the surface area of the entire development to be at a higher elevation.
  • The adoption of a Resolution of Necessity requires the City to consider and make the following findings:
    • The public interest and necessity require the project
    • The project is planned or located in the manner that will be the most compatible with the greatest public good and the least private injury
    • The property sought to be acquired is necessary for the project
    • The offer required by Section 7267.2 of the Government Code has been made to the Owner of record for the full amount established as the fair market value of the property.

For more information about the Resolution of Necessity findings, view the staff report.

About the City of Santa Clara

Located at the heart of Silicon Valley about 45 miles south of San Francisco, the City of Santa Clara truly is “The Center of What’s Possible.” Incorporated in 1852, Santa Clara covers an area of 19.3 square miles with a population of 120,000. Santa Clara is home to an extraordinary array of high-tech companies, including Applied Materials, Hewlett-Packard, Intel, Nvidia, Oracle, and Ericsson. The City of Santa Clara is also home to Santa Clara University, California’s Great America Theme Park, and Levi’s® Stadium, home of the San Francisco 49ers and Super Bowl 50. For more information, go to www.SantaClaraCA.gov.

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