A two-year running dispute between Equity Office, the owner of Techmart, and the City of Santa Clara over the property’s maintenance assessment from the City, continues. Techmart is part of a city maintenance district that includes the Hyatt Hotel and the Santa Clara Convention Center.
One of the goals of the City’s 1985 maintenance agreement with the three closely-connected properties, according to former city employees involved in the negotiations, was to avoid disputes. Techmart has indicated in past, that it would prefer to withdraw from the maintenance agreement with the City and hire a private firm. Techmart is one of five office properties the real estate company owns in Santa Clara. The San Francisco 49ers recently opened a sales office in Techmart.
The Council unanimously overruled Techmart’s objection, while agreeing to a motion by Lisa Gillmor to return any surplus in the maintenance account at the end of the fiscal year. In the past, surpluses have been carried forward and applied to the following year’s assessment. Council Member Kevin Moore excused himself from the discussion because of an “equity share” with a Techmart tenant.
Equity Office, one of the largest commercial landlords in the United States as well as in Silicon Valley, is part of private equity – and leveraged buyout – behemoth Blackstone Group. In addition to Equity Office, Blackstone owns media monitoring company Nielsen Media, crafts retailer Michael’s Stores, Hilton Hotels and The Weather Channel.
Last week, Blackstone was sued for about $8 billion for allegedly skimming $2.1 billion from the leveraged buyout of Extended Stay America. The creditors bringing the suit blame the buyout for the hotel chain’s bankruptcy by burdening the hotel chain with too much debt and tightly restricting its finances.
Carolyn Schuk can be reached at email@example.com.