SAN JOSE — A proposed deal announced more than a year ago that would have relieved San Jose of its historic but debt-laden and perennially money-losing Hayes Mansion hotel conference center has collapsed.

San Jose officials this week relisted the sprawling Edenvale property for sale, and said they had to dig into budget reserves to make up for revenues they had anticipated from the proposed $47 million sale to Washington D.C. hotel developer Asha Companies.

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Hayes Mansion subsidies frustrate San Jose City Council Nanci Klein, assistant director of economic development and the lead negotiator for the sale, said the deal fell apart after Asha failed to deliver a $1 million cash deposit that was offered at the time the proposed sale was announced in June 2016.

Nearly a year later, Jay Patel, a partner at Asha Companies, signed an agreement on May 12 that stated the deposit was due in two days. The deposit was never made.

Klein says the city didn’t require Asha Companies to provide “proof of funds” in that purchase agreement, but will require verification of funds from future prospective buyers.

“There wasn’t a reason given,” said Klein. “They didn’t tell me why they didn’t deliver the $1 million — they just didn’t, and we needed to move on.”

Patel and other company officials did not respond to requests for comment Wednesday.

San Jose officials a year ago said the bid from Asha, which owns a portfolio of hotel properties throughout the U.S., was the best of two offers received by the city. Asha in 2013 bought 10 new hotels consisting of 860 rooms in North Dakota, Montana, Wyoming and Texas.

It isn’t the first time San Jose’s quest to unload the mansion has fallen flat.

In early 2016, San Jose mulled over what officials called a “lucrative” offer from Global Bancorp Commodities and Investments, an entity formed in Florida but based out of San Diego, but the city never disclosed terms and a deal never materialized.

Klein acknowledged that when the city received the proposal from Asha Companies last year, the offer to pay $47 million seemed “very optimistic.”

“The number they came out of the gate with was very high,” Klein said. “Then, in the end, when they came to fund it, I think there was reconsideration.”

But city leaders were excited at the time. Had the deal gone through, it would have been more than enough to retire the mansion’s $36 million in debt — mostly from repairs, remodels and rising operating costs — and to pay down some other debt related to the city’s golf courses and the Berryessa Community Center.

Mayor Sam Liccardo counted on proceeds from the Hayes Mansion sale in his budget proposal, but when the sale fell apart, finance officials shuffled at the last minute to make up for the lost revenue.

The failed sale has forced the city to reduce what it had planned to sock away in a future reserve — a “rainy day” fund — by nearly $6 million, said Jim Shannon, the city’s deputy budget director.

While that didn’t jeopardize the city’s ability to pay for cops or pave roads, San Jose now won’t be able to eliminate debt from the mansion, golf courses and community center — costing taxpayers $5.8 million a year.

Councilman Sergio Jimenez, whose district includes Hayes Mansion, said the city “shouldn’t be in the business of owning hotels.” Jimenez said he was “disappointed” the deal fell through after a yearlong investment of time from city staff.

“Owning hotels is not the city’s expertise, and we’re incurring a lot of debt with this property,” Jimenez said. “It’s important for the city to get out from under it.”

Built in 1905, the Hayes Mansion was named after Mary Folsom Hayes Chynoweth, whose family made its fortune mining iron in the Great Lakes area. She settled in San Jose in 1887. The Hayes heirs, who ran newspapers that eventually became the San Jose Mercury News, sold the paper and most of the estate in the mid-1950s. It was declared a historic landmark in 1975.

San Jose bought the 6.32 acre property in 1984 for $2.5 million. With a series of restoration projects, the mansion became a hotel conference center with 214 guest rooms, 24 conference rooms, a day spa, pool and fitness center, and restaurant. But the restoration also left the city with $60 million in debt on the property at the time.

Land use consultant Bob Staedler wasn’t surprised Hayes Mansion didn’t sell. In 2012, he worked with two separate developers to buy the property for a senior assisted-living facility and a sports rehab center. Neither project panned out.

The developers realized they couldn’t make enough money to pay the mansion’s debt and maintenance needs, Staedler said, and weren’t thrilled about its “bizarre and off-the-beaten-path” location on Edenvale Avenue. It’s a suburban area about 20 minutes from downtown San Jose, across from what once was the rustic-themed Frontier Village amusement park.

Staedler, who once worked for the city’s redevelopment agency, said the recent offer seemed too good to be true.

“I’d heard through various sources that this deal didn’t seem to make sense financially,” Staedler said. “The returns aren’t huge, and that’s why people were kind of shaking their heads.”

But all hope is not lost: Jimenez said he recently met with “local owners of hotels” who are interested in Hayes Mansion, though he wouldn’t disclose their names.

“There is active interest in purchasing it,” Jimenez said.