VTA court battle over eminent domain could go to a jury trial—even though the agency no longer wants the site

SAN JOSE — A court battle over the site of a proposed housing tower in San Jose could wind up in front of a jury within months if a powerful regional transit agency can’t craft a settlement with the property’s owner.

The legal fight involves the location of a potential residential development at 17 East Santa Clara St. in downtown San Jose, Santa Clara County court and real estate records show.

The Santa Clara Valley Transportation Authority filed a lawsuit in 2022 whereby it sought to seize ownership of the property, which occupies a prime spot near the anticipated entrance to BART’s planned Downtown San Jose station.

VTA at the time stated it required the property to build key components of a BART station planned for the corner of Santa Clara Street and First Street.

Then in 2023, the transit agency abruptly shifted course and abandoned its eminent domain efforts. However, the judge has not dismissed the case, which clears the way for a possible jury trial or settlement. The VTA is the plaintiff in the case, and Downtown SJ Towers, an affiliate that Kirkley controls, is the defendant, court papers show. But if the case were to go in front of a jury, the panel could decide that VTA owes Kirkley more than the transit agency has proposed as compensation for the property.

Kirkley is among the companies with business interests near First and Santa Clara streets that believe the VTA’s BART efforts have damaged their endeavors — even before a massive construction project to build the station gets underway.

Now, discussions for a possible settlement of the eminent domain proceeding, along with depositions of witnesses in the case, are underway, according to a source with knowledge of the case as well as court papers filed in connection with the matter.

A jury trial could begin as soon as April of this year, if the two parties can’t strike a settlement deal. The trial originally was slated to begin this month.

However, in November 2025, both sides stated more time was needed to complete depositions of witnesses, and the possible trial was delayed for two months.

“The VTA seeks to take the defendant’s property,” the Kirkley-headed affiliate stated in a court filing. “The primary issue in the case will be compensation.”

VTA officials said the agency changed its mind about the property because a new design for the BART station no longer required the properties.

The train stop is expected to be one of four BART stations located within San Jose.

“The design innovations for the project indicate that construction of a secondary headhouse of the project’s Downtown San Jose Station would not be required, thus removing the need to acquire the property,” the VTA stated in the court papers.

In 2021, real estate executive Loida Kirkley had proposed the development of a 26-story, 192-unit housing tower. The residential tower has yet to break ground, just one of several downtown San Jose high-rise projects that have been proposed and even approved by the city but never launched.