VTA Apologizes for Construction Delays, Pledges to Pay Businesses for Lost Revenue

The Valley Transportation Authority (VTA) apologized for behind-schedule construction that has blighted an East San Jose neighborhood and put scores of businesses at risk of going under.

“I want to begin with a very meaningful apology,” Santa Clara County Supervisor Cindy Chavez said during Thursday’s VTA Board of Directors meeting. “We made a mistake.”

In a unanimous closed-session vote, the board pledged to pay businesses for the financial loss caused by the drawn-out Santa Clara-Alum Rock Bus Rapid Transit project. It’s unclear how much that will cost, but with upward of 200 businesses affected it could be a substantial amount. The agency will present a compensation plan when it meets again next month.

The decision followed hours of emotional testimony from business owners located in Little Portugal, a historic neighborhood along the Alum Rock corridor. A few-dozen attendees showed up to the board meeting to make a case for compensation. They blamed the languishing roadwork for driving away customers and profits.

Several held up black-and-white signs demanding “Respect for East San Jose.” They elaborated on that message during public comment: that a combination of poor political representation and bureaucratic mismanagement has failed the East Side. Only in East Side, they remarked, would a transit route touted as a way to elevate the neighborhood render it a ghost town.

“This is not Almaden, this is not Mountain View, I know we’re the poor part of town,” said Romesh Vidanage, who co-owns Sweet Passions Bakery with his mom. “I know we don’t have money, but we want to make money. This is a hindrance to us. Twenty-seven years of business going down the drain.”

In recent weeks, community groups and chambers of commerce have assayed the damage and counted at least 210 businesses that have suffered losses as a direct result of the VTA project.

“You make it through the recession, you survive the impossible,” said Dacia Faria, who has lived and worked in Little Portugal for 15 years. “You don’t expect to struggle again while the rest of the economy is rising up.”


Peter's Discount Outlet will close its doors because of the construction.

Vidanage said he’s lost $500 a week since the project started from a precipitous drop in customer walk-ins. Peter Lim, who owns Peter’s Discounts, has lost 60 percent of his clientele and plans to shutter the place as soon as he sells off inventory.

INS-TAX owners Jose and Martha Rios counted $40,000 in lost income because customers can’t find parking and aren’t willing to navigate the bombed-out obstacle course outside their business. A Bite of Wyoming claimed to have lost $35,000 in a single month because of blocked-off driveways and forced closures.

“I put my heart and soul into this business,” the diner’s owner, Joni Zamora, said, noting that the place has thrived since 1960. “Now I’m afraid I’m going to lose it.”

Bacalhau Grill and Trade Rite Market, a San Jose institution opened in 1945 that bills itself as the largest Portuguese and Brazilian market in California, has struggled to retain all but devoted regulars. Its co-owner, Luis Lourenco, said he grew so frustrated about losing more customers that one day that he stood in front of an earth-mover to prevent an excavation for which he received no prior notification.

A nearby office reportedly had to lay off nine of its 10 workers, a cellphone vendor packed up and moved and a soccer store shuttered for good.

“There are major issues dealing with safety as well as economic justice,” Dennis King, head of the Hispanic Chamber of Commerce Silicon Valley, told the board. “It’s time for us to talk, time for pause, time for discussion.”

The route connecting San Jose’s East Side to downtown should have been done this month after a year-and-a-half of work. But a series of delays and a pipeline breach in July brought the $114 million project to a halt and has pushed the estimated completion date to 2017.

In a letter sent to business owners earlier this week, VTA chair Perry Woodward apologized for the hardship caused by “an unprecedented and extremely challenging period of construction.”

“A number of incidents and concerns led VTA to the difficult and unusual decision of halting work with the prime contractor constructing the project,” he wrote.

Unmarked utilities, wet soil, design changes and procurement delays pushed the project behind schedule and over budget. Earlier this month, the VTA dumped its general contractor, Goodfellow Top Grade, citing safety concerns and a lack of progress. However, residents said they want the VTA to examine its own culpability in this mess.

“We want this project but it’s been mismanaged from the beginning,” Lourenco said. “When you have a contract that’s bid $8 million under [the engineer's estimate], that's a red flag. When you have contractors taking lunch breaks and blocking my customers, that's a red flag.”

Meanwhile, a seven-mile stretch of thoroughfare remains intermittently gutted and coned off. Customers who used to frequent local shops and officers have avoided the neighborhood altogether. Car collisions have reportedly become a daily occurrence, and cyclists have been forced to route around the miles-long stretch of dug-up roadway. Fizzled-out streetlights have darkened the neighborhood, coinciding with a reported uptick in graffiti, vandalism and break-ins.

Earlier this year, Carlos Carreira bought the iconic Sousa’s Portuguese restaurant to reinvent it as Adega. He expected construction to finish, as advertised, this fall. His wife, Fernanda Carreira, was born and raised in Little Portugal. His daughter, Jessica Carreira, was born at a nearby hospital and attended a nearby school. She recently moved from Portugal, where she worked at a Michelin Star restaurant, back to San Jose to help run the family business.

“We based a life decision on this, based on the information they presented,” Carlos said. “We put everything we have into this. I mean that—our life savings.”

The prospect of another year-plus of roadwork means the family venture will get off to a shaky start.

“We were going to hire 12 people,” he said, with a shrug. “Now, we have to re-think that plan. After hearing about all these break-ins, maybe we need to pay more for a security system. I don’t know.”

As part of its compensation deal, the VTA will work with local nonprofits to help affected businesses with marketing. The agency plans to have the roads open in time for the holiday rush.

“This holiday season, we will work with the businesses to light the trees and to put out holiday decorations to remind people that we are open for business,” Chavez said.

The agency will also enlist a third party, possibly a retired judge, to oversee this issue moving forward. It will also provide extra security and graffiti clean-up for the duration of the project.

Community organizer Peter Ortiz said the debacle has prompted the neighborhood to form a business association. They also created a Facebook page and launched a campaign to #ShopAlumRock.

“That's one good thing that can come out of this,” he said. “That the businesses can organize and present a unified message.”

Chris Lepe, an East Side native and planner for transportation nonprofit TransForm, said the VTA has a responsibility to keep the businesses afloat.

“This is pretty tragic,” he said. “This was something that was supported by the community. This project was supported by many of you on the board.”

He demanded that the agency take a close look at how the project got to this point and come up with a plan to prevent this from happening again. Especially, Lepe said, as the VTA plans to solicit public support for a new transportation tax in 2016.

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Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. …and these are the same guys we want to trust the $6bn BART proposal, too? Goodness me. We should’ve learned with light rail. But history repeats itself, first as tragedy….

  2. How can this be possible,we are in 2015 these VTA embessils have No idea how to handle a project these people should all get fired. And hire knowledgeable people who knows what they doing..

  3. This is what happens when you accept the lowest bid, instead of the lowest responsible bid. It happened with the out of state contractor selected to build light rail in downtown SJ. It is happening right now for a two block sidewalk widening on San Carlos Street between Market and Second streets. A SIDEWALK job is still not completed after 6 months! That contractor is in bankruptcy, and sections of its work have been jack hammered up and repoured three times. At least that’s much faster than the 2-1/2 YEARS for the sidewalk job on San Carlos between Third and Fourth Streets. The people running these construction projects couldn’t find their butts with a mirror and a GPS locator.

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