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SAN JOSE — In November, Dennis Fong was celebrating the grand opening of a newly renovated portion of the Tropicana Shopping Center that he owns with other investors. Fong had spent about $8 million on the aging property, capped by the remodeling of an old department store. Days later, the San Jose Redevelopment Agency had some bad news for Fong and his fellow property owners: The shopping center was being condemned to make way for a project the city believes will help revitalize the long blighted neighborhood around Story and King roads. Instead of just fighting the city for a fair price, Fong and his fellow property owners are challenging San Jose’s right to take the property under its power of eminent domain. It’s an uphill battle that even Fong’s attorney, Norman Matteoni, admits will be hard to win. “I am not aware of any particular take that didn’t happen in San Francisco and, in recent years, for San Jose either,” Matteoni said. But in Fong’s case, Matteoni thinks he can show the city is misusing the blight designation. He says the property isn’t blighted, just less attractive, economically and otherwise, to city officials. “Greater economic return can now justify a finding of blight on an older commercial development, as opposed to vacant stores, broken window panes and not being maintained,” said Matteoni, a partner with San Jose’s Matteoni, Saxe & O’Laughlin. Fong and his lawyers also claim the city is trying to force out Asian landowners to appease the mostly Latino neighborhood. Fong has threatened to file a civil rights action against the city along those lines. He’s also got a separate suit against the city claiming it defamed him by referring to him as a “slumlord” in an e-mail circulated by a city worker. San Jose City Attorney Richard Doyle says the idea the city is discriminating is “completely without merit.” The renovations undertaken by Fong and his fellow owners, he says, were “too little, too late,” adding that blight is still the right word to describe the 10-acre shopping plaza. “Nothing has really changed,” Doyle said. “We now just have the wherewithal to go forward and do the project.” Doyle said the city is completely within its power to take the shopping center, along with another shopping complex across the road, and have one developer revitalize the intersection. “It’s part of a comprehensive scheme to make it work and bring it under single ownership to solve a long-term problem,” Doyle said. San Jose’s Redevelopment Agency first designated the Tropicana property as blighted in 1991. To stave off the wrecking ball, Fong and other owners agreed in 1996 to make improvements, and Matteoni says they’ve lived up to their part of the bargain. But in 2002, city redevelopment officials turned their attention to property across the street, and decided it too needed redeveloping. The city condemned the neighboring property and eventually awarded developer Blake Hunt Ventures, based in Danville, the right to rebuild. “The RDA wanted the same developer to do both corners,” Matteoni said. “They said they need to update both corners and they want to integrate them and have blended architecture and tenant mix.” According to Matteoni, San Jose then terminated its agreement with Fong and the other owners, citing delays and code violations, and awarded Blake Hunt Ventures a contract to redevelop their land too. Lawyers for Fong and the three other owners are preparing for a bench trial, set for September, at which they’ll argue the city is misusing its taking powers. “You can’t take private property from one owner and give it to another private owner,” said Rebecca Hughes, an associate with McManis Faulkner & Morgan, also working for Fong. “There has to be some public purpose.”

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