Did a developer stiff the City of San Jose over $1 million on a condo project in downtown San Jose? As reported in today’s San Jose Mercury, the City Auditor is alleging that the developer of the Park Townsend complex, located at West Julian and North First Street, inflated construction and administrative costs thereby reducing the amount owed to the city. The developer, Goldrich & Kest, built the Park Townsend complex with the assistance of a subsidy, $4.6 million, from the Redevelopment Agency. In return, the City of San Jose was to receive 25% of the profits after all of the Park Townsend condos were sold in 2005. According to the City Auditor, the result of the inflated costs reduced the profits owed to the city by more than $1 million. If Goldrich & Kest does not pay the amount alleged to be owed, the Redevelopment Agency could sue to recover the amount due.

My question . . . why did it take the City over three years to realize it was being shortchanged over $1 million???