The future of a controversial Hecker Pass Road development approved by the city of Gilroy is in jeopardy after delays in road improvements have forced the developer to go into default on the property.

Additionally, the City Council’s narrow July 2, 2018, approval of the “agri-tourist” center at 2740 Hecker Pass Road has expired, city spokesperson Rachelle Bedell confirmed, as no building permits were applied for within a year of approval.

A split council approved San Jose-based developer Hecker Pass Commercial LLC’s project, which consists of three commercial buildings that include 21,200 square feet of retail space, a 9,964-square-foot winery and 22 live/work units located on the second floor of two of the buildings. The project is located near several residential communities and across Highway 152 from the Gilroy Golf Course.

The project has been met with opposition from neighbors who live on the adjacent Lone Oak Lane and surrounding streets, who expressed concerns about noise, traffic, safety, lighting, parking and appearance that they said doesn’t fit with their quiet neighborhood.

A legal notice published in the Gilroy Dispatch on Jan. 24 by El Dorado Hills-based Fidelity National Title Company notified Hecker Pass Commercial that it has placed a lien on the property for unpaid balances, estimated at more than $977,000. The lien is slated to go to public auction on Feb. 19 at the Santa Clara County Superior Courthouse “unless you take action to protect your property,” the notice reads.

Skip Spiering of Hecker Pass Commercial said the development company is currently working on “curing” the lien. He said delays by Caltrans to approve a permit for a roundabout on Hecker Pass Road, which would provide secondary access into the property, have “really hurt us.” The roundabout is required to be operational prior to construction of the commercial project, according to the development agreement.

“The fact that we don’t have the roundabout has killed the commercial project,” Spiering said. “We’ve been in no man’s land.”

He said Caltrans issued the permit in December, and construction is expected to begin in April. A call to Caltrans requesting confirmation of the timeline was not returned as of press time. The roundabout, which requires Caltrans approval since it is proposed on a state highway, was originally expected to be constructed by the end of 2018.

Hecker Pass Commercial is currently looking for investors for the property.

The six-acre property is listed on LoopNet, an online database of commercial land for sale, for a $3,850,000 investment.

The listing, which was posted in October and last updated on Dec. 18, bills it as a “fully entitled mixed-use development project.” The developer estimates that construction costs could exceed $15 million, with annual rent netting more than $1 million. The listing noted that “Gilroy has a high demand for housing in an area with strict growth control.”

The Hecker Pass Specific Plan, approved in 2005 and last modified in 2015, provides a framework for growth and development within 423 acres surrounding Hecker Pass Highway between Santa Teresa Boulevard and Gilroy Gardens. It allows for 521 residential units as well as “small-scale commercial uses” that reflect an “agri-tourist” theme along the corridor.

The North Hecker Pass project, which consists of 72 single-family homes north of the agri-tourist commercial development, is currently in the plan check phase, according to city planning documents.