SAN JOSE — Two big Bay Area residential projects engulfed in a real estate fraud case — one in San Jose and one in Fremont — are moving closer to completion, court papers show.
The projects that are making substantial progress are The Almaden, a 91-unit residential complex on Almaden Road in San Jose; and Savant at Irvington, a 93-unit residential project on Osgood Road in Fremont, according to papers on file with the U.S. District Court in a fraud case brought by the Securities and Exchange Commission.
The San Jose and Fremont housing projects are among the numerous Bay Area properties that were originally proposed or developed by real estate executive Sanjeev Acharya and his company Silicon Sage Builders. The SEC has accused Acharya and Silicon Sage of fraud and swindling hundreds of investors. Silicon Sage’s properties have been shoved into court-ordered receivership.
These two projects are crucial because they may offer the most promising opportunities for defrauded investors to salvage at least a small portion of their fraud-spawned losses arising from Silicon Sage’s shattered real estate empire.
Savant at Irvington is located at 42111 Osgood Road in Fremont and The Almaden is at 1821 Almaden Road in San Jose.
Of the two, the Fremont project was deemed to be markedly closer to completion than the San Jose development, according to an update by the court receiver. That official tracks the progress being made to raise the maximum amount of cash from as many former Silicon Sage properties as possible.
“The construction at the Osgood project is nearing completion,” the receiver stated in court papers. “It is currently in the closeout phase of the process of getting the temporary certificate of occupancy and addressing small punch list items from the city inspectors.”
The biggest unexpected challenge that produced delays was a height clearance issue in the parking garage. That setback aside, the major work in the Fremont residential complex is complete.
“All units and common areas of the building have been completed and finalized by the city inspector,” the receiver stated in the court papers.
While not nearly as far along as the Fremont complex, The Almaden development in San Jose is pushing ahead toward completion at a steady pace, the court papers indicate.
“Almaden continues to make substantial construction progress,” the receiver stated in the update to the court. “Water and gas have now been tied into the building. The exterior of the project is now 90% enclosed.”
A section of the structure must remain open until PG&E brings energy into the building.
“Difficulties with PG&E energizing the building is the main factor causing further delay to certain aspects of the project,” the receiver’s report disclosed. ” the court papers state. “The cause of this has been PG&E’s inability to have this work re-bid, scheduled and completed. It is apparently experiencing unprecedented volumes of work orders.”
The victims of the alleged fraud hope the proceeds from selling the projects will create funds to repay them after Acharya’s real estate empire crumbled beneath a mountain of debts and legal woes.
The receiver hopes to generate cash through sales of condo units in both the San Jose and Fremont projects.
Separately, the court-appointed receiver has found some evidence that Archarya and Silicon Sage used a Ponzi-style approach to paying some investors in the Bay Area projects.
“The receiver is in the process of analyzing the use of investor funds to determine if funds from later investors were used to make distributions to earlier investors,” the court papers stated. “In an analysis of 14 random transactions in 2021, the receiver determined that three of those investments by new investors were used … to make payments to earlier investors.”
