Click here if you are unable to view this gallery on a mobile device.
SAN JOSE — This humble little block is an unlikely place for the high-stakes drama that unfolded here when Google came to town.
It’s little more than a worn-out collection of two-bedroom bungalows, old auto repair shops and empty lots. Even if you went looking for the street, you might never find it: The signs that once identified Lorraine Avenue have disappeared.
But for 40 years, it’s been the pride of Nick D’Arpino, an 88-year-old whose welding business on West San Carlos Street once backed up to Lorraine. One by one, he purchased nearly every property on the block. Who would think this regular guy who grew up an orphan and lost nearly half his hearing as a diver in the Navy would be able to leave such a legacy to his children? All he needed to complete his Monopoly board was the little beige bungalow smack in the middle of the block. The house at 538 Lorraine was the Boardwalk to his Park Place.
“This is my whole life here,” he said. “This is the only thing I ever worked for. This was our livelihood.”
For the past 16 years, that little beige house has been home to Martin and Elizabeth Pacheco, a hard-working couple in their 60s who had rented it from Marie Belardi — “a lovely lady” — before she passed away last year. The house didn’t look like much — just 896 square feet with two bedrooms and a leak in the bathroom ceiling — but it was a loving home. If D’Arpino bought it — as everyone on the block figured he would — the Pachecos were certain they would still have at least another couple of Christmases there before he developed his block.
But six months ago, D’Arpino’s lifelong dream was upended and the Pachecos were sent into an emotional and financial tailspin that had them packing up boxes for a reluctant move this month.
That’s after Google came to town.
This is the untold story of what happened when the world’s largest internet company came lumbering onto Lorraine Avenue and made an unusual and clever power play that reaped millions for one family but stoked resentment and frustration for others.
The upheaval to the lives on Lorraine Avenue is one example of the tension playing out across this mile-long edge of downtown San Jose where Google is buying up property for a “transit village” of housing, shops, restaurants, parks and office space for more than 20,000 employees. And it shows how challenging it will be for Google to get what it wants in downtown San Jose, and still be a good neighbor.
In this story, when the corporate giant was made aware of the havoc it wreaked, it began, in a grand gesture last week, to try to make amends.
Good faith and a handshake
The homes on Lorraine Avenue were built in the 1920s when the Santa Clara Valley was filled with orchards and the Del Monte cannery, just a few blocks away, was in full swing. The smell of stewing tomatoes filled the summer air.
Jack Belardi, who worked at the former California Cheese Company nearby, and his wife were already living on Lorraine in 1959 when Nick D’Arpino got his first job at the welding shop behind them.
Barely 5-foot-3 with bright blue eyes, D’Arpino had moved with his wife and first child from New Jersey after working as a diver, repairing propellers underwater, during the Korean War. The pressure damaged his hearing, but he has always been grateful for the career training it gave him.
By 1971, D’Arpino took over the business and bought the building. Over the years, his wife, Ray Marie, and their two children, Vince and Donna, would often sort scrap metal and sweep the shop floor on weekends. It wasn’t long before he started expanding, first buying the buildings on either side, then the radiator shop, the laundromat, the empty lots and bungalows on Lorraine. He eventually moved his S & S Welding company down West San Carlos and rented out the old building to a tire shop.
Deals were struck with good faith and a handshake. He wasn’t quite sure what he would do when he completed his Monopoly board — maybe build an apartment building that would fill up the block.
Whatever it was, he said, he just wanted it to benefit his children — “that they got income and life would be a little easy for them, rather than struggling like we did, my wife and I. It was just a vision of everyone being happy. That’s it.”
He got a taste of that happiness last summer when he sold the acre lot where he had relocated his welding company for $13.5 million to an affordable housing developer — but that money is tied up because the family had to quickly reinvest it to avoid capital gains.
Little house on Lorraine
Lorraine Avenue was different — and that little house represented decades of investment and vision. He knew Google was interested. Sometime last year, the company’s real estate partner, Trammell Crow, called with an offer, but it wasn’t enough to win over D’Arpino.
Through the years, he tried to be a good neighbor. When kids from Lorraine Avenue would stop in with broken spokes on their bikes, he would fix them for free. Jack Belardi often brought in odds and ends for repair — a broken lawnmower, a chair, his wife’s favorite spaghetti pot.
“He always told me, ‘Nick, this property, if ever something happens to me, it’s yours,’” said D’Arpino, walking along Lorraine Avenue on a recent rainy day. “‘Don’t worry about it.’”
When Jack Belardi died, the house was instead passed on to the next generation of Belardis. His son and daughter-in-law, Don and Marie, lived a mile away in a three-bedroom house on Clintonia Avenue in the Palm Haven neighborhood of Willow Glen. So Lorraine became a rental.
Over the years, D’Arpino offered several times to buy the house, meeting Marie Belardi at the Baskin Robbins ice cream shop on Willow Street that her son, Dave, owned. Each time, she demurred, saying she needed the rental income. When she died last June at the age of 85, D’Arpino tried again, appealing to the third generation of Belardis.
The property was what the D’Arpinos came to call “the missing tooth” in the parcel map of Nick’s purchases. If he made this deal, he would own everything on the block but a couple of parcels at the tip, a complete square from Josefa to the edge of the boarded-up Union Hall building at Montgomery. They met again at the Baskin Robbins.
Zillow estimated the house was worth close to $890,000, but both D’Arpino and the Belardis knew that this particular house was worth much more to D’Arpino. He offered $1.2 million, which he considered more than fair.
Instead of accepting, however, the Belardi heirs countered with an unusual proposal. If D’Arpino wanted Lorraine, they told him, he would also have to buy their late mother’s house on Clintonia.
The Belardis had nothing against D’Arpino. “Nick is a great guy,” said Dave Belardi, who recently moved to Florida. But “the rest of the family just wanted to sell both properties and get it over with. As far as I was concerned, it was a good idea.”
D’Arpino balked. Who would accept such a deal? Surely, he figured, the Belardis would realize the outlandishness of their counteroffer and would agree to sell him the Lorraine property by itself. He waited, but the Belardis went quiet.
D’Arpino didn’t know what had happened until he read The Mercury News on Dec. 12. And there it was: a photo of 538 Lorraine, the Christmas decorations hanging from the front porch.
Google had bought it.
And it also bought the Belardi house, a mile away, on Clintonia.
But Google didn’t pay the market rate of what would have been close to $2.3 million for both houses. Instead, it made the Belardis an offer they couldn’t refuse: $4 million.
“Oh boy. It’s gone,” D’Arpino thought when he read the paper. “This put a bullet in the center of everything.”
He tries not to hold a grudge, he said, but for a big, successful company like Google “why do you pull a small thing like this on a little guy like me?”
Life inside the ‘Google house’
After Google bought the Belardi house, rumors rippled down the one-block long street of delivery truck drivers, mechanics and service workers making their homes here.
“Everyone thought Google had bought the whole block,” said one woman who lives halfway down the block. “Everybody was scared.”
The Pachecos, who have lived for 16 years in what quickly would become known as “the Google house,” were given six months to move — and their frantic odyssey through the Bay Area housing crisis began.
Martin Pacheco works in customer service in the heating and cooling business and Elizabeth in the front office of a construction company. It was already a stretch paying their $2,030 monthly rent, but with Martin helping to maintain the house, Mrs. Belardi hadn’t raised the rent for eight years. Their prospects for a place that would accommodate their son and his three young daughters who spent afternoons and weekends with them quickly appeared grim.
“You should see the places I was looking at,” Elizabeth, 63, said. “It was a disgrace what we saw in our price range. It was so horrible what we saw out there, what people are offering.”
They made a plea to their new landlord, a property manager who worked for commercial real estate agency CBRE. Could they have more time — until Christmas even — to save money for the move?
“We told her that we would like to stay, but they would only extend it two weeks if necessary, and we needed proof that the new place wasn’t ready,” Martin said. “That’s what bugged me the most — have a little compassion.”
He couldn’t understand the rush. What was Google going to do with this little house anyway — especially since D’Arpino still owned the rest of the block? The soonest the company would begin construction on its transit village is at least two years away.
“If they boarded it up, it would be a slap in the face,” Martin said. “We said we’d take care of it. It’s been our home for a long time. But no dice.”
How do you call Google?
With just weeks before their June 11 move-out date, they found a two-bedroom apartment on Willow Street for $2,400 a month. They needed $4,000 to cover move-in fees — money they each had to borrow from their employers to cover.
The apartment was so small, there was no room for a kitchen table, their sofa or the hutch from Elizabeth’s Aunt Frances.
Without time for a garage sale or a truck to drop it off for charity, Martin hauled each piece to the sidewalk for garbage pickup.
For a couple that hoped to be nearing retirement, their frustrations grew.
“We worked all of our lives for what, to be displaced?” Elizabeth asked. “I don’t see how that’s fair.”
They had gotten nowhere with CBRE, the couple said.
And how do you call Google?
She went to the city website and learned that as part of the contract with the city, Google agreed to pay “compensation and relocation assistance” for those it was displacing. But no one made that offer to the Pachecos.
The same day Elizabeth called the city to complain, The Mercury News called Google to ask about the Pachecos’ plight. No one got back to her from the city. But someone from Google called Elizabeth the very next day, she said, first the property manager who had refused to extend the lease, then Google’s community relations person.
She poured out her heart.
She told them about the loans they needed to take to pay the move-in costs, the furniture that didn’t fit, her mother’s heart attack last year, her brother’s cancer, how difficult it was to stay positive in front of her grandchildren. Even Nick D’Arpino, she told them, wasn’t kicking out his renters like this. “I’m so stressed out, I feel like no one is listening,” she told them. “No one is hearing.”
When the conversations were over, she called her husband: “Are you sitting down?”
Martin was driving home from work. “Listen to this,” she said.
She explained the phone call with Ricardo Benavidez, Google’s community relations manager.
“He apologized profusely and wanted to do everything to make it right with us,” she told him. “Ricardo says they are very community-minded, it’s like part of who they are.”
If the Pachecos wanted to stay in the house, he told them, they could keep living there for at least 18 months and probably more, until the project was underway. Google would pay all the expenses they incurred from their down payments to breaking the lease they had signed. They’d even pay to replace the furniture they had to give away — and to fix the leak in the bathroom.
And for the remainder of their stay, they said he told them, Google would cut their rent in half.
“Really? Is it true?” Martin asked his wife. “Then I started crying and she started crying. We were bawling.”
If they were able to save $1,000 a month, they thought, maybe they could put a down payment on a manufactured home when it was time to finally move.
When they both got home that night, they sat on the couch and said a prayer.
What’s next for Lorraine Avenue?
Since it started revealing its plans for downtown San Jose, Google has been a generous donor to a number of the city’s nonprofits, from helping homeless programs to high school coding classes. It even paid to help restore a Vietnam Memorial that was vandalized. But for a company that takes a picture of every house on every street, it didn’t see what was really happening on Lorraine Avenue.
“We want to be good neighbors and preserve the local community,” Mark Golan, Google’s vice president of real estate and development, said in a statement to the Bay Area News Group. “There was some confusion surrounding the status of this particular property, but we’ve been glad to help Elizabeth and Martin remain in their home.”
What happens with D’Arpino’s property remains uncertain. But Google is closing in. The company is in escrow on the corner property next door that fronts Montgomery and includes an Enterprise rental car lot and the old Union Hall that faces Lorraine.
Ralph Borelli, the development consultant now representing the D’Arpinos, said the family is moving forward with its own plans to develop the block, and will gladly build a horseshoe around 538 Lorraine. He is in the process of preparing plans to present to the city for a possible high-density apartment complex with retail and offices. If the D’Arpinos were to sell their stake in Lorraine Avenue, they’d certainly make millions.
“I’ve got other people looking at it other than just Google. I get called every week,” Borelli said. “There’s more than one player out there.”
And so the gamesmanship on this Monopoly board continues. The days of the handshake to complete a deal are long gone.
“We’re not bad-mouthing nobody,” D’Arpino said. “This is just life the way it happened. I’m not mad at the Belardis. I’m not mad at Google. I’m not mad at nobody. Just after all these years, the effort that we personally put into this place — it hurt a little bit.”
The next generation of D’Arpinos understands what their father has been through to build his little empire on Lorraine. But with a little distance and a touch less sentimentality, they also understand that while old San Jose is disappearing, change is inevitable and the future doesn’t look so bad.
“Times have changed, you know?” Nick’s son, Vince, said. “You get these powerful companies going through — they’re actually going to make it better for the majority of people, I think. But there are going to be some people that get hurt. It’s unfortunate. But what do you do?”
