Zoe Morgan/Town Crier
A sign for Dutchints Development LLC is still on display outside 5150 El Camino Real, site of a proposed housing complex.
The 196-unit, high-density housing project at 5150 El Camino Real, approved by the Los Altos City Council in 2019, can move ahead even if the original developer is no longer involved.
The 3.8-acre, 76,500-square-foot property is currently in receivership due to the ongoing financial struggles of Dutchints Development LLC. The Los Altos-based Dutchints and its managing director Vahe Tashjian face numerous legal challenges alleging mismanagement and misappropriation of investor funds. Dutchints is in default on its $41 million loan on the property, secured in 2018.
The problems have prevented development from moving forward. However, a new property owner could choose to develop the site using the approved plans, according to Los Altos’ community development director Jon Biggs.
“The entitlements run with the land, so a new owner could submit construction documents and the building permit application and, once a building permit is in hand, begin building what the city council has approved,” Biggs said last week. “No need to go back to the city council and get another approval for the current project on the books.”
The approved project calls for 172 condos and 24 townhouses, with 28 of them affordable. Approvals also included plans to convert an adjacent 24,000-square-foot lot at 745 Distel Drive into a park. That property – offered in exchange for paying park in-lieu fees – has gone through foreclosure, according to property records. Absent the park, the developer is on the hook for an estimated $9.5 million in park in-lieu fees.
A Santa Clara County Superior Court judge April 28 granted a preliminary injunction preventing Dutchints from selling the 5150 El Camino property until lawsuits are settled.
“It is abundantly clear that defendant Vahe Tashjian has grossly mismanaged (the 5150 property) despite having raised at least $21 million in investments and private loans, and receiving eight offers to purchase the property,” attorneys for numerous investors said in April 21 court documents.
Plaintiffs fear they are “at risk of losing their entire investment,” according to court documents.
Tashjian denied the allegations, blaming the pandemic of the past year for financial troubles, which he vowed to rectify.
“Defendants … argue that plaintiffs should wait and see whether Mr. Tashjian can somehow negotiate a sale of the property that will make everyone whole,” the plaintiffs said in court documents. “This argument is ludicrous and, frankly, delusional.”
The 5150 investors are suing Dutchints for breach of contract and fiduciary duty, among other charges. Two of the investors have filed a complaint in intervention, also granted in an April 28 court decision, because their shares increased. Others are suing over diluted profits.
Tashjian and Dutchints are involved in at least 14 separate lawsuits in the county pertaining to misappropriation of funds.
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Housing project can go forward without troubled developer - Los Altos Town Crier
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