SAN JOSE — A downtown San Jose food and drink venue has shut its doors as it tangles with what its owner describes as excessive city red tape that hobbled his business and forced it to close.
Kaizen Lounge in San Jose has gone dark, says venue owner Freddie Jackson. He wondered whether city politicians such as Mayor Matt Mahan can help untangle the thicket of city regulations that have throttled his operations.
“The mayor says get rid of red tape,” Jackson said in an interview with this news organization. “But what the city has done to me is the definition of red tape.”
In 2024, Kaizen opened its doors, serving food and drinks at 33 E. San Fernando St., where Gordon Biersch brewery restaurant operated a popular food and drinks venue until it closed in 2018.
In recent months, however, San Jose city code enforcement staffers determined Kaizen Lounge was illegally operating as a late-hours nightclub because the venue had failed to obtain a special permit to serve drinks after midnight.
Mayor Mahan said he recently convened a “conversation” between small business owners and city planners to identify ways to improve the permitting and inspection process.
“Improving our relationship never means looking the other way,” Mahan said. “All small businesses must play by the same rules to ensure fairness for entrepreneurs and safe experiences for residents.”
Matters came to a head on July 9 when the city’s code enforcement staff requested that the San Jose Appeals Hearing Board impose a fine of $235,000 on Kaizen Lounge due to the alleged violations of city rules.
“The city has engaged in various and ongoing enforcement measures,” the San Jose Planning Department stated in an email it sent to this news organization. “Kaizen has repeatedly failed to comply. Code Enforcement is following all policies and procedures to ensure a swift and fair outcome for all.”
The Planning Department declined to elaborate further because of pending litigation involving the city and Kaizen.
On June 9, the city of San Jose filed a lawsuit against several individuals and business entities, including Jackson, Kaizen Lounge, Freddie J’s Presents, and Green Valley Corp., Santa Clara County Superior Court documents show. Green Valley owns the 33 E. San Fernando property that is leased to Jackson’s operations.
At the July 9 meeting, the Appeals Hearing Board rejected five separate motions to determine how to proceed with Kaizen Lounge. After protracted wrangling, the board eventually voted 4-2 to impose a $50,000 fine on Kaizen Lounge.
The fine was imposed despite Jackson offering evidence that the city process to issue a conditional use permit had taken roughly a year and was still not complete.
At multiple times during the hearing, a visibly exasperated Jackson asked San Jose staffers what actions he should take to comply with what the code enforcement agency required of him.
Joseph Hatfield, a San Jose code enforcement supervisor, offered Jackson a stark solution: Kaizen Lounge would be in compliance if it ceased operations.
In the lawsuit, the city claimed that Kaizen Lounge and Jackson have committed multiple code violations.
“Kaizen Lounge is an unpermitted and unlicensed bar and nightclub located in the downtown core of San Jose with live DJs, amplified music that can be heard beyond the area under the control of Kaizen, dancing, and alcoholic drinks including bottle service,” San Jose alleged in its lawsuit.
The lawsuit also claimed Jackson had failed to obtain a conditional use permit that allowed Kaizen Lounge to serve alcohol between midnight and 2 a.m.
“As such, their operation is a public nuisance,” San Jose claimed in the lawsuit.
At the hearing, Jackson stated that he was operating legally. This week, Jackson confirmed that the lounge ceased operations on July 10. Jackson also has launched negotiations with Green Valley regarding his lounge’s rental agreement.
Jackson has no timetable for reopening. For now, the lounge’s once-lively location has abruptly morphed into yet another empty retail and restaurant site in downtown San Jose.
“Downtown San Jose has so many empty storefronts, so many boarded-up buildings,” Jackson said. “Other than San Pedro Square, the downtown is dead until 10 p.m.”
With his business closed, Jackson simply hopes he can somehow navigate San Jose’s bureaucratic maze and obtain whatever is needed to allow him to operate after midnight without running afoul of the city’s code enforcement staff.
Jackson recalled in the interview that he has been active in downtown San Jose since 2000.
“I love downtown San Jose,” Jackson said. “I just want to get back to my livelihood. I have put my heart and soul into this business.”
Kaizen Lounge at 33 East San Fernando Street in downtown San Jose, seen on July 10, 2026. (George Avalos/Bay Area News Group)