Business & Real Estate

Developer of major Los Altos housing project faces continued legal woes

Dutchints
Town Crier File Photo
Dutchints Development is involved in mounting litigation, calling into question a large planned housing complex on El Camino Real.

Dutchints Development, the luxury real estate developer that secured city approval to construct a large housing complex on El Camino Real, continues to be involved in mounting litigation that raises questions about the direction of the project.

The development at 5150 El Camino – which would be one of the largest housing projects in Los Altos – could bring more than 80 below-market-rate units to a city struggling to provide affordable housing. It would turn a 77,000-square-foot office space into two five-story buildings and 196 units of prime real estate along the El Camino corridor.

But, as recent court documents filed in Santa Clara County Superior Court reveal, the developer is facing continued legal trouble, including among its own investors. Dutchints is no longer eligible to fully participate in the project’s ownership group “as a developer as opposed to an investor” due to damage to its reputation and finances, according to its own lawsuit filed against an investor in early October.

The investor, Richard Spieker, had sued Dutchints in August claiming that a $2.5 million investment made into the development was instead used to pay Dutchints’ existing debts and operational expenses. The case was settled, but the developer claimed that due in part to amplification of the lawsuit in local media, the relationship between Dutchints and the ownership group was “disrupted” and asked for $6 million in damages. The Town Crier revealed Dutchints’ initial legal troubles in an August investigation. Spieker’s lawsuit was the first directly related to the project on 5150 El Camino. Previous suits centered around Dutchints’ other projects throughout the area.

Since that investigation, which found five ongoing lawsuits involving Dutchints, the developer has been sued at least seven more times. The plaintiffs include both those who sold and bought property from Dutchints, those who loaned money to Dutchints claiming to have been stonewalled and those who are investors themselves. They allege breach of promissory notes, unjust enrichment and fraud, among other violations.

In a brief phone call last week, an attorney for Dutchints declined to discuss specifics regarding any lawsuit, before blaming the Town Crier’s reporting.

“Anybody can sue anybody for anything at any time,” said the attorney, Michael Abbott. “We don’t litigate complaints in the media.”

One lawsuit, filed Sept. 30, includes documentation indicating that Vahe Tashjian, managing director of Dutchints, sold $2.3 million – representing more than 80% of his shares – in the development’s ownership group. The sale was signed June 2 by Tashjian and the buyers, Farshid and Sudi Sabet. In the lawsuit, the Sabet family alleged that Tashjian claims to still own the shares, despite the contract indicating he sold them in June.

Tashjian did not respond to a request for comment.

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