August 31, 2009

The Hugo Hotel Has A Date With A Different Kind Of Bench

Hugo Hotel in San Francisco (www.SocketSite.com)

The San Francisco Superior Court is scheduled to start hearing the San Francisco Redevelopment Agency’s eminent domain suit over the Hugo Hotel on Sixth Street today.

The Agency had offered $3,250,000 for the building two years ago but the Oregon-based owners were holding out for $7,000,000. The burned-out building has a current tax assessed value of $474,894 and a yearly tax contribution of $7,269.58 to the city.

Hugo Hotel Sign (www.SocketSite.com)

From a plugged-in reader with respect to the building last year:

The reason this eyesore remains is that [the owner] is impossible to deal with. The last time I tried, he said he wanted $50,000 up front to talk.

Plans for the long vacant and art covered ex-hotel should the Redevelopment Agency prevail: razed to the ground and below market rate housing erected.

UPDATE (9/2): From a plugged-in reader:

To correct a factual error...The owners are local, not Oregon-based. They live in Hillsborough on the Peninsula, despite what the mailing address for tax records may say.

Art-draped hotel focus of suit [Examiner]
JustQuotes: Eminent Domain For Affordable Housing On Sixth Street? [SocketSite]
And Now Back To The Hugo Hotel (And Eminent Domain On Sixth) [SocketSite]

First Published: August 31, 2009 10:45 AM

Comments from "Plugged In" Readers

"Art" ???

If an ugly burnt building with urine soaked sidewalks that are also littered with druggies and p1mps is your idea of Art, then I am filing suit to include the Tenderloin as San Francisco's Premier Art Neighbourhood*.

(and yes Grammar Cops, the "u" in neighbourhood is from my days in Great Britian)

Posted by: Chad at August 31, 2009 11:24 AM

Some might say that this structure already provide below-market-rate housing. So far below market rate, in fact, that only bums and squatters dare live there. But hey, they're a constituency too, aren't they? At least in SF ...

Posted by: Jimmy (No Longer Bitter) at August 31, 2009 11:37 AM

Chad,

The only thing you mention that is related to the building is "burnt". The rest of your post all regards to problems in the neighborhood. So if I owned a painting and lived in that area would my painting no longer be art because I lived in a bad area?!?

Really the only point of contention on this place is how much is the lot worth, $3.2 million that the redevelopment agency wants to pay or the $7 million that the owner claims it is worth. Are you under the mistaken impression that the fact that some artists were allowed to drape some art pieces from of his building has anything to do with the suit in question?

Why does the city and the owner fighting over the value of the lot give you ideas about trying to sue over declaring the tenderlion an object of art? Just trying to understand the point of your post.

Posted by: Rillion at August 31, 2009 11:38 AM

the problem I see is that the city decides how high any building can be, what style it can be, and what price the land should be, and that it should be sold; for the greater good. How is this any form of a free market or capitalism, this is pure socialism and it's dangerous to know that the nuts at the B of S have the power to do this.

Posted by: viewlover at August 31, 2009 11:49 AM

he owns the building and should be able to hold out for whatever price he wants. this is total crap that the city can pull this. there are plenty of other buildings to buy and house the less fortunate in.

also, this building is a perfect example of something that SocketSiters never seem to believe happens...and it does happen, a lot. That is that building owners get tired of dealing with all the bullshit that comes with owning income property in San Francisco and eventually leave their buildings vacant because they don't need the money and certainly dont need the headaches.

So here is your reference point people. And it doesn't just happen on 6th Street, it happens all over town. Northside, southside, real SF, fake SF.

Posted by: Adam at August 31, 2009 12:01 PM

@viewlover

You're arguing for eliminating zoning? Eliminating building codes? Eliminating any input from neighbors on what property owners can do?

I'm not saying SF is the ideal, but I'm wondering why, with these views that are somewhere to the right of Glenn Beck, you're participating on a San Francisco based real estate blog?

If you don't already live in Florida, Nevada, or Texas already, I think you need to move there, cause if you stay in the Bay Area, you'll continue to mumble about "pure socialism" until your dying days.

Seems like you'd be much happier somewhere where you could run a high-rise slum in the middle of a gentrifying neighborhood while carrying your loaded concealed firearm to city council meetings to "express your God-given right of free speech."

As to the topic of the building -- I love the furniture, and I'll be sad to see it go, but I must say I hope the owners get screwed here. In every town, there's always that crazy guy who owns the dilapidated building smack in the middle of downtown, who's been holding out for 3x market value, letting the building fall apart, vacant, for decades, convinced if he just hangs on long enough, some government agency will cry "uncle" and cave in to his demands, making him as rich as he thinks he deserves. Oh, and when they do, he'll raise his price at the last minute. So classic.

Posted by: Kurt Brown at August 31, 2009 12:06 PM

At least we know from this that our profoundly efficient markets do support the arts.

Objecting to blight has nothing to do with socialism. With ownership of property comes responsibility. Threats to proper order beget threats by the properly ordered.

Posted by: Mole Man at August 31, 2009 12:06 PM

Hey non-profit mafia mouthpieces: since we pay your salaries with our taxes, can we order you to get off this site, shut up and get back to work taking section 8 vouchers and disability checks for a living? Thanks...

Posted by: stucco-sux at August 31, 2009 12:18 PM

Hey non-profit mafia mouthpieces: since we pay your salaries with our taxes, can we order you to get off this site, shut up and get back to work taking section 8 vouchers and disability checks for a living? Thanks...

In the same way that I can call up Steve Jobs and tell him to quit screwing around with those damn iPods and put out something cool because I own one share?

Posted by: anon at August 31, 2009 12:24 PM

Kurt, you should move to Cuba as that is the only communist country left. Typical of those that always hate capitalism but love the money it creates, bunch of opinionated free-loaders. Besides, I'm not a republican or a conservative, I just believe owners have rights and agree with Ex-Justice Day O'Connor on her position of eminant domain. Your problem is that you don't seem to believe that the owner has any rights, and you trust the nuts at City Hall to do what is best. You trust people like Daly to do what is best for you, good luck you socialist loser. Impose blight fines if you like, but do them fairly and across the board. This owner may be a nut case as well, the city is full of them, but he does OWN the property!!!

And for your information, I'm pretty happy living in SF, you're the one that seems to have your panties in a bunch.

Posted by: viewlover at August 31, 2009 12:27 PM

The city should be required to restore it. WITH wood frame windows.

Posted by: Jeff at August 31, 2009 12:29 PM

Not sure why this one parcel is eminent domained and hundreds of other parcels are not.

Witness some prime lots that are fenced around and growing with weeds for decades. Why not sieze them and sell them at auction?

Posted by: anon at August 31, 2009 12:40 PM

@Rillion - Your allegations are incorrect.

The Art that I am referring to is the same "Art" that the building is allegedly showcasing, which includes those ugly hanging furniture (that looks like it could drop on an unwitting sidewalk-er and give him/her a concussion. As well as the Mural, which is "Exhibited" on a sidewalk that is soaked with urine and surrounded by "Adult Stores" (to put it mildly).

You asked So if I owned a painting and lived in that area would my painting no longer be art because I lived in a bad area.

Probably not. But of course, if you display / "install" your painting or "Artwork" right next to a P*rn store, and on a sidewalk with streaks of fresh urine in front of it then YES, it will not be considered Art.

Hope you get the idea.

Posted by: Chad at August 31, 2009 12:55 PM

@viewlover

OK, I'll make an attempt to reduce the temperature by apologizing for my extreme generalizing, and taking your response in kind as setting us even.

For the record:

o I've been a property owner, and landlord, many times over. I strongly believe owners (and landlords) have rights, and that, in general, SF has tipped the balance way too far toward renters, to the detriment of both renters and landlords.

o I've a dyed-in-the-wool capitalist that has started 3 companies and supported payrolls of up to 150 people.

o I love the US because of the capitalist opportunities it provides and could never live anywhere else.

o I think Chris Daly is a loony.

o I think Cuba is a classic example of the failure of extreme forms of socialism.

That said, I think that zoning, public input, occupational health and safety, environmental protections, building codes, and yes, even eminent domain, in rare cases, are required tools to temper the excesses of the extreme forms of capitalism. I think referring to these tools as "pure socialism" is just a little hyperbolic. I shouldn't have responded with the same degree of hyperbole, but what can I say? You inspired me :)

Posted by: Kurt Brown at August 31, 2009 1:01 PM

If I were the owner, I'd stick it to the city by selling the building to wal-mart or China.

Posted by: sleepiguy at August 31, 2009 1:05 PM

Aren't wal-mart and China the same thing?

Posted by: OneEyedMan at August 31, 2009 1:09 PM

Kurt, thanks for the explanation. I agree that zoning is necessary, as for the rest of it, not sure. I did live in Houston, the Montrose and there was an adult video bookstore in the same block as a church. Sunday mornings were very interesting as both were packed. The last unit I bought passed all of the City codes and planning but every single window leaked after the first rain so so much for codes and inspectors. Just a bunch of robots looking at documents but not even inspecting the property in a way that makes sense and protects the people that they are meant to protect. Public input in this town has gone too far, there could be some very progressive architecture but we end up with boxes. I recycle everything I can so do agree with some environmental concerns, but only when they are real and not just the talk of the day. I hate the I'm so green because I solar powered my house but can't drink anything but bottled water talk. Eminent domain may make some sense, but in SF, it's probably just a tool used by ego inflamed politicians. Why don't they go after the other eye sores.

Any way, we all have different opinions and that's the beauty of a site like this.

Posted by: viewlover at August 31, 2009 1:15 PM

China is only communist in name, they are pretty much capitalists, and they believe in slave labor to boot.

Posted by: viewlover at August 31, 2009 1:17 PM

Were it not for the ridiculously low tax basis, we wouldn't be having this discussion now.

With an annual tax bill of $7.2k, I have to ask: exactly which kind of socialism is the problem here?

Posted by: El-D at August 31, 2009 1:27 PM

With an annual tax bill of $7.2k, I have to ask: exactly which kind of socialism is the problem here?

That's a bingo! Is that how you say it? That's a bingo?

You just say bingo.

Posted by: anon at August 31, 2009 1:31 PM

"he owns the building and should be able to hold out for whatever price he wants."

Totally true based on certain assumptions.
1) The owner will pay the cost to neighbors, police, fire, health, etc. associated with having so many squatters concentrated there and in the neighborhood - if he does this he can hold on to it as long as he wants
2) He pays taxes based on the value of the property today, not 30 years ago. If he thinks it is worth $7M and wants to hold on to it, then he should be paying taxes based on a $7M value, else he acknowledges that city laws have some application to his property

Posted by: BayAreaBum at August 31, 2009 1:35 PM

If the city applies eminent domain here, then we can kiss increased height limits in this area goodbye. The current owner would sue the city because he's been trying to get an increased height limit for quite a while.

This area could easily support taller buildings. It is close to dense transit and nearby other tall buildings.

I don't like the idea of applying ED towards blight. ED should be reserved for appropriating parcels that are in the path for building roads and such. For example if there's just one house in the preferred routing for a highway and the alternative detour around that house would cost a billion, then it makes sense (financially and morally) to ED the house to get it out of the way. For blight situations like this, aren't there other legal tools that can be used besides ED ?

BTW - I like how this building has served as an installation art piece for the last decade or so and will be sad do see it go.

Posted by: The Milkshake of Despair at August 31, 2009 1:36 PM

At least the grafitti on this building doesn't look some weird acid trip mixed with Barney and Friends... like the North Beach Pagoda.

50,000 up front to talk? He should pay anyone 50,000 just to take that building off his hands.

Impossible owners are susceptible to one thing: eminent domain.

Posted by: jessep at August 31, 2009 2:09 PM

$107,146.00 is the taxes on 7 million. This place would have been cleaned up years ago if it had not been for Prop 13 subsidizing lazy land owners

Posted by: dan at August 31, 2009 4:59 PM

I recycle everything I can so do agree with some environmental concerns, but only when they are real and not just the talk of the day.

I hate the I'm so green because I solar powered my house but can't drink anything but bottled water talk.

kinda like people who claim to be environmentalists because they recycle.

Posted by: josho at August 31, 2009 5:41 PM

I'm not an environmentalist, I said I agree with some concerns. Just cause you can read does not mean you understand.

Posted by: viewlover at August 31, 2009 5:58 PM

OneEyedMan: Thank you. That was beautiful.

Posted by: PreFitness at August 31, 2009 6:09 PM

"he owns the building and should be able to hold out for whatever price he wants. this is total crap that the city can pull this. there are plenty of other buildings to buy and house the less fortunate in."

I don't completely disagree, property owners should be able to do what they want with their property, to an extent.

If this building was being held hostage by rent controlled tenants, I would totally get why the property owner wouldn't want to spend any money that would be difficult to recoup; however, this building does not have rent controlled tenants, it has been left to deteriorate for 30 years in an area known for earthquakes which makes it a health hazard for anyone around it.

So the property owners need to either bring it up to minimal seismic safety standards and maintain those standards or sell it to someone who will.
It does not exist in a vacuum - if it did, it wouldn't be worth very much.

Posted by: geekgrrl at August 31, 2009 6:17 PM

How the hell is stealing property from an owner to house a very limited number of people who qualify for BMR housing for the greater public good/least private injury? This is thievery and wrong. I could understand and support the decision to fine the owners daily/monthly, whatever, for leaving their property in gross disrepair, but this is outright criminal and wrong for the city to attempt to excercise eminent domain in this case. If I were the owners, I'd fight like to the death!

Only communists do this sh1t! Be afraid, SFers, be VERY afraid should the city be successful!

Posted by: SFisFullofCommies at August 31, 2009 8:48 PM

I could understand and support the decision to fine the owners daily/monthly, whatever...

You mean, something like a realistic property tax?

The real thieving going on here came down with Prop. 13. I'm with everyone else who doesn't like the idea of eminent domain for non-infrastructure, but this is what you get when you let people gamble with no minimum wager.

Posted by: El-D at August 31, 2009 11:33 PM

China = capitalism plus slave labor.
The wave of the future! Yay!

Posted by: dissent at September 1, 2009 12:25 PM

With an annual tax bill of $7.2k, I have to ask: exactly which kind of socialism is the problem here?

That's a bingo! Is that how you say it? That's a bingo?

You just say bingo.

Nice Basterds reference...

Posted by: REpornaddict at September 1, 2009 2:45 PM

To correct a factual error... The owners are local, not Oregon-based.
They live in Hillsborough on the Peninsula, despite what the mailing address for tax records may say.

Posted by: Johnny Boy at September 1, 2009 8:51 PM

the 7.2K that is being paid with basically no return on that "investment" for 20 years is being used to fund the agency that is arrogant enough to challenge private ownership.

Posted by: viewlover at September 2, 2009 9:25 AM

"To correct a factual error... The owners are local, not Oregon-based.
They live in Hillsborough on the Peninsula, despite what the mailing address for tax records may say."

You sure they don't officially live in Oregon where there is no state income tax and just 'visit' Hillsborough for much of the year?

Posted by: Rillion at September 2, 2009 9:43 AM

Whoops nevermind, just remembered I'm confusing my northwest tax avoidance states, Washington has no state income tax, Oregon has no sales tax. With living on the Washington/Oregon border being the sweet spot, live in Washington and shop in Oregon.

I'll renew the usual complaint about Socketsite having horrible software with no edit feature!

Posted by: Rillion at September 2, 2009 9:46 AM

the 7.2K that is being paid with basically no return on that "investment" for 20 years is being used to fund the agency that is arrogant enough to challenge private ownership.

"Basically no return" is the owner's fault and the owner's fault only. No one is preventing him from using the property in a way that provides a return, he'd just rather let it rot and hope for a "return on the investment" by selling it to another entity (quite possibly the redevelopment agency itself).

Posted by: anon at September 2, 2009 9:58 AM

why can't the city up the limits, which they would do for the next developer when they milk them? The property would be worth more with higher building limits and would find a private buyer most likely, but the agency does'nt want to pay more or lose the chance of getting this property for less. How is this the owners' fault only? The dictators in this city are the ones to blame in my opinion. One agency does'nt work with another, they just grow more powerful based on thier own agendas and self-governed metrics of success, creat more public housing regardless if it is an assault on private citizens constitutional rights to own property. THis is collusion within the City government against a private citizens. There is a fundamental flaw and a slippery slope, where does the line get drawn. The City is out of control.

Posted by: viewlover at September 2, 2009 4:12 PM

How is this the owners' fault only?

Because they allowed it to fall into disrepair and become completely vacant and burned out. I have no problem with the other points that you mention, but other places simply DO NOT do the same thing that this owner has done. If we reward his dangerous behavior, you're going to see more and more buildings go the same route in order to "coax" the city into doing whatever it is the building owner wants. I don't like the idea of eminent domain being used, but this owner is clearly on the fringe - I don't like the idea of people being locked up against their will, but would make exceptions for some of the crazies on 6th St - same deal here.

Posted by: anon at September 2, 2009 5:22 PM

So, who won? Jury found for sale to SFRA, but price was $4.6M.

http://sfappeal.com/news/2009/09/eminent-domain-wonks-rejoice-you.php

Posted by: OneEyedMan at September 11, 2009 4:01 PM

Owners need to to maintain their property.
This owner has been approached tons of times and doesn’t care about market value, enhancing t society, cleaning up a bad neighborhood, anything other than his fantasy bottom line. He missed the big 1990s run up in crap location values. There is a (Here come some pinko words---- all you hard core neo cons look away) Social Responsibility in keeping property functioning, not rotting on the corner.

The reason his tax record shoe a mailing address is in Oregon is so he does not have to pay State income tax to California. Everyone who likes to cheat the government has a second home in Oregon. Or at least a post office box.

Posted by: kathleen at September 15, 2009 5:52 PM

Owners need to to maintain their property.
This owner has been approached tons of times and doesn’t care about market value, enhancing t society, cleaning up a bad neighborhood, anything other than his fantasy bottom line. He missed the big 1990s run up in crap location values. There is a (Here come some pinko words---- all you hard core neo cons look away) Social Responsibility in keeping property functioning, not rotting on the corner.

The reason his tax record shoe a mailing address is in Oregon is so he does not have to pay State income tax to California. Everyone who likes to cheat the government has a second home in Oregon. Or at least a post office box.

Posted by: goodbonesgal at September 15, 2009 5:56 PM

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