The opening of SiliconSage Builders’ HQ drew mayors from around Silicon Valley.
San Jose’s Sam Liccardo, Santa Clara’s Lisa Gillmor and Fremont’s Bill Harrison joined the April 26, 2016, soiree on the developer’s Mathilda Avenue office rooftop in Sunnyvale
The municipal leaders, all from cities with SiliconSage projects underway, praised the urbanist vision espoused by its charismatic CEO, Sanjeev Acharya.
Gillmor—a second-generation South Bay real estate scion—hugged Acharya as she exited the elevator and commended SiliconSage on camera for spearheading projects “that we’re incredibly proud of.” Among them, Santa Clara’s first downtown development in 20 years. The 44-unit Downtown Gateway condo complex sat across from the Gillmor family’s longtime commercial property holdings on Franklin Street, an economic conflict that forced her recusal during rezoning votes.
Gillmor elicited laughs by acknowledging her initial reservations about the unproven company, whose CEO sought to bring the tech sector’s disruptive ethos to an old-school industry. The lighthearted quip proved remarkably prescient.
Four-and-a-half years after that rooftop reception, the U.S. Securities and Exchange Commission (SEC) slapped SiliconSage and its principal executive with criminal charges.
Greasing the Traps
Acharya rose to prominence by courting Silicon Valley politicians and leveraging his prominence to woo members of the South Asian community with promises of double-digit annual returns. Though he denies the allegations, the SEC accuses the CEO of swindling backers out of $119 million through a Ponzi-like scheme that paid old investors with newly-raised money rather than proceeds of previous projects.
SiliconSage marked something of a second act for Acharya, who spent two decades as a software engineer before breaking into real estate during the Great Recession.
In Acharya’s telling, the career reinvention was borne of necessity.
A few years after buying an old Sunnyvale home in 2007 with plans to subdivide it into two units—one to live in and the other to rent out—banks tightened up lending, forcing Acharya to find another way to fund his project. “I reached out to friends and their friends to ask if they wanted to invest,” he told the Silicon Valley Business Journal in 2014. “I raised $425,000 in two weeks.”
He finished the project in 2011, sold both lots and quit tech to pursue his new calling.
SiliconSage garnered glowing media coverage for skirting conventional financing and maintaining control of everything from entitlement, to design and construction. By focusing at first on smaller mixed-use projects typically eschewed by bigger competitors, SiliconSage appealed to cities encouraging infill development.
Keeping everything in-house paired with crowd-sourced funding also eliminated the checks and balances that typically accompany institutional financing. While other developers passed on small, for-sale housing projects, Acharya moved forward.
If a development like Santa Clara’s Downtown Gateway got through construction without grease traps and venting to accommodate future restaurant tenants, few outsiders had a chance to raise concerns. The problem was immediately apparent to some observers.
“Many of us residents were like ‘What were they thinking?,’” Santa Clara Councilman Suds Jain said. “We were kind of perplexed at why they would do that.”
Acharya’s earnestness seemed to overshadow any red flags.
He became known for his community outreach, often starting talks with residents earlier than other developers and going to more trouble to convince them of what he seemed to also believe: he was doing something good.
Acharya spent much of his energy similarly convincing public officials as his vision grew more ambitious. Politicians eager for housing development and campaign money eagerly vouched for the real estate neophyte.
In 2017, SiliconSage executives donated $7,200 to Liccardo’s practically uncontested re-election bid. That same year, they chipped in $1,800 to North Side Councilman Lan Diep. In 2020, they contributed $3,000 to Matt Mahan’s successful run for a District 10 seat.
San Jose counci lmembers Pam Foley and Raul Peralez benefited as well from SiliconSage’s largesse. The firm also sponsored the Silicon Valley Organization’s Mayor’s Breakfast, giving the chamber’s political action committee a donation of $20,000 in February 2020 at Liccardo’s behest, according to disclosure reports.
SiliconSage extended its generosity to a host of nonprofits. In 2019, the company offered then reneged on a $15,000 sponsorship to SPUR.
The company’s philanthropic arm pledged $25,000 to sponsor the mayor’s San Jose Jazz Society breakfast but only coughed up 20 percent. It contributed to the Mission City Community Foundation, a pet charity of Mayor Gillmor.
Acharya enjoyed generous access to the top political officials. Gillmor’s Oct.10, 2018, calendar shows the entry: “Met to discuss Santa Clara Unified School District Support.” On Oct. 31, 2019, GIllmor discussed North San Jose, and a month later, she and Santa Clara Councilwoman Debi Davis undertook a “Tour of SiliconSage Franklin Project,” according to the Santa Clara mayor’s schedule.
Liccardo’s calendar shows two City Hall meetings, one on Dec. 14, 2016, and another on Jan. 12, 2018, in his office—both to discuss “business development,” with a February 2017 phone check-in in-between about “N. 1st and Montague.”
On July 12, 2018, Acharya and Liccardo lunched at the Farmer’s Union restaurant.
In 2018, Acharya submitted plans for a project that promised to help urbanize San Jose’s largely industrial North Side by bringing 1.5 million square feet of office space and 3,000 residential units to 30-plus acres of farmland at Seely Avenue and Montague Expressway.
Acharya’s North Side proposal was met with enthusiasm, but a 2006 legal agreement between San Jose and Santa Clara halted housing development in the area.
Though Acharya wasn’t the only developer hoping to build more housing in North San Jose, officials’ talks to adjust the 2006 agreement seemed to ramp up after the SiliconSage proposal arrived, an indicator of the excitement and focus around the project.
And while most developers seek to steer clear of the heated battles between San Jose and Santa Clara, Acharya showed up to a January 2020 Santa Clara City Council meeting to urge leaders to find common ground with their neighbor, rather than head into mediation over whether San Jose could build more homes on its northern edge.
He appealed on a personal level to Santa Clara council members. “I’m trying to not feel like the child of divorced parents fighting each other,” he told them.
Acharya’s public posturing as peacemaker, however, belied the private battles he waged over his company’s viability.
By the time the pandemic hit in early 2020, Acharya could no longer hide SiliconSage’s financial woes. His unconventional approach became a liability.
In the eyes of federal regulators, Acharya’s reliance on financial backers of primarily South Asian descent signaled an “affinity fraudster,” a con-man preying on a group with whom he shared common ground.
The SEC complaint casts his promises of big payoffs as false claims of “exorbitant returns” when he knew the company hadn’t turned a profit since at least 2016. In reality, according to the SEC complaint, SilconSage operated more like a pyramid scheme. Acharya says in court filings the SEC has it all wrong.
If even one of the SEC’s accusations proves true, it could turn out to be one of the South Bay’s biggest financial scams, one in which several of the region’s most prominent elected leaders unwittingly played a role.