Developer Offers $47 Million for San Jose’s Hayes Mansion

If all goes as planned, San Jose will finally free itself from a huge drain of taxpayer money: the historic Hayes Mansion.

The city plans to sell the property—which consists of a hotel, conference center, the Silver Creek Restaurant and Palm Plaza Lounge—for $47 million. That should be be more than enough to cover the $36 million debt on the mansion, which the city bought for $2.5 million back in 1984.

The buyer, Asha Companies, owns several hotel properties throughout the U.S. and submitted one of the highest bids for the San Jose hotel, which has been listed on the National Register of Historic Places since 1975.

The City Council will vote on the deal Tuesday. If approved, Asha offered to put up a $1 million cash deposit.

In an interview with the Mercury News, Councilman Ash Kalra applauded the sale, calling the mansion a drain on public resources. He said he’s excited to finally pay off debt while preserving the hotel as a historic landmark.

Kalra, fellow Councilman Raul Peralez and Mayor Sam Liccardo issued a joint memo late Friday afternoon directing City Manager Norberto Dueñas to encourage “labor peace agreements” between Asha Companies and Hayes Mansion employees. Here is the background noted in the memo:

The Hayes Mansion has been a wonderful asset to San Jose and its visitors, but has also been a financial drain on the City, both from an operating cost and debt service perspective. The proposed sale to a buyer who is willing to maintain the quality service the Hayes Mansion currently provides is the fiscally responsible action for the City to take.

Some of the business terms negotiated between staff and Asha Companies are crucial for the well-being of the employees, as well as the community. First, it is important for the Hayes Mansion to maintain its current use as a hotel and conference center so that it continues to accommodate travelers to San Jose, especially in an area of the city where there are few choices for room and board. Second, we are happy to see that one of the business terms addresses City/community use of the conference facilities at mutually-agreed upon times at no cost. This would facilitate hosting events, such as our Hayes National Night Out event.

We also recommend that staff continue earnest conversations with Asha Companies to encourage best efforts for allowing labor peace agreements for their employees. Continuing the facilitation of labor peace negotiations benefit the company, its employees, and the City.

Built in 1905, the expansive home was named after Mary Folsom Hayes Chynoweth, whose family sold the mansion in the 1950s. The same family owned a chain of newspapers, including one later rechristened the Mercury News.

4 Comments

  1. Truly a Great White Elephant and an example of why Government shouldn’t get into the private sector.

  2. > We also recommend that staff continue earnest conversations with Asha Companies to encourage best efforts for allowing labor peace agreements for their employees. Continuing the facilitation of labor peace negotiations benefit the company, its employees, and the City.

    Could someone explain in non-PC English what this means?

  3. It cannot be explained. This is San Jose political psycho babble at its finest.

  4. I’ll have a go at translating:

    We are paying lip service to the concerns/complaints of the poor bastards whose fate is in the hands of a company that intends to screw them, and doing so by publicly directing unnamed subordinates to pay additional lip service to the fate of the screwed in the presence of our friends, the screwers, before everyone pauses for free refreshments and a good laugh.