More ugly news for SF’s hospitality industry, as the 3,000-room Hilton San Francisco Union Square and Parc 55 complex was just valued at only $550 million, after being valued at $1.6 billion eight years ago. And now the two hotels are just months from foreclosure.

The poster child case for the San Francisco “doom loop” narrative may be the Hilton San Francisco Union Square and Parc 55 complex, which has 2,900 very fancy hotel rooms, but is certainly on hard times. The complex was surrendered to its lender in June 2023, and placed into receivership last fall. Wells Fargo is now servicing the $725 million mortgage that the owners walked away from, but new developments make it pretty clear the place might not be worth a full payment on that $725 million.

The San Francisco Business Times reported Monday that the hotel complex has just been reappraised and is now valued at only $553.8 million. The very same complex had been valued at $1.56 billion in 2016, when then-owner Park Hotels & Resorts took out that giant mortgage. So yes, this represents a 65% loss in value from the previous appraisal.

This is largely because the bonds that backed that mortgage have been downgraded repeatedly. “In a report last week Moody's Investors Service downgraded each of the deal's bond classes,” the Business Times reports. “The original class A bonds — the highest possible rating — were downgraded two notches to Aa2 last year, and last week further lowered another five notches to Baa1.”

That may actually be good news for finding a buyer, because it certainly settles the matter of whether or not the asking price will be too terribly high. It will not, so someone playing the long game could make a killing once the local high-end hospitality market rebounds. But the clock is ticking, as the property will go into foreclosure if a buyer is not found by September 1 of this year.

Per the Business Times, the two hotels had an occupancy rate of 53% according to the most recent quarterly data. The complex has been losing money every year since 2020, though did manage to break about a $1 million in profit last year — that is, before making service payments on that $725 million mortgage, which wiped out any and all profits.

Related: Owner of SF's Largest Hotel, the Hilton Union Square, Is Walking Away, Surrendering It to Lender [SFist]

Image: Parc 55 San Francisco - a Hilton Hotel via Yelp

The tables may have turned in the China Live restaurant-landlord dispute, as now it's Wells Fargo suing the landlord who’d previously sued China Live over unpaid rent, and the bank is threatening to foreclose.

George Chen’s upscale food court China Live was supposed to reinvigorate Chinatown when it opened in 2017, and in many ways it did — up until the pandemic hit. But we learned about a year ago that the landlord Cypress Properties was suing Chen and China Live for $4.2 million in unpaid back rent. That lawsuit was settled this past January, but it sure seemed an odd power struggle was afoot between Chen and Cypress Properties, with more at stake than just back rent.

Indeed, there is more at stake. On Tuesday, the San Francisco Business Times reported that Cypress Properties’ lender Wells Fargo was suing Cypress Properties over a reportedly delinquent $21.2 million mortgage. Wells Fargo claims they are now owed $30.5 million with the interest that has accrued. The lawsuit claims that Cypress Properties’ affiliate 644 Broadway LLC has not made payments since November 2022.  

Significantly, China Live is responsible for about 75% of the building’s rent. And from a quote the Business Times pulls from the lawsuit, it sounds like Cypress Properties’ other investors may be spooked by, well, all the lawsuits that have been happening that involve the property.

The Business Times quotes the lawsuit as saying “Only recently (within the past few weeks), Borrower informed Plaintiff that Borrower’s investors will not invest additional capital, including to pay Borrower’s counsel for past due legal fees in the (Unlawful Detainer) Action and the Civil Action, and for future legal fees in the Civil Action, which is scheduled for trial in August, 2024."

Meanwhile, George Chen seems to be watching these developments from a safe distance. He told the Business Times that if the building is foreclosed, he’d be willing to step in and buy the property at a “fair market price,” while also indicating he could take his food hall concept elsewhere.

“We already have [letters of intent] out for new locations as I’m paying more than double market rent at Broadway and [it] doesn’t make sense for long term,” Chen told the Business Times.

The 644 Broadway building is also home to the Boxcar Theatre of The Speakeasy fame, six other retail tenants, and nine low-income residential apartment units.

Related: Chinatown Food Hall China Live Hit With Eviction Lawsuit, Allegedly Owes $4.2 Million In Back Rent [SFist]

Image: Janelle Q. via Yelp

The impending foreclosure on the mid-Market apartment building NEMA is apparently no longer impending, as the developer behind the luxury high-rise has struck a deal with its creditors.

Even those of us who cannot afford good Champagne were considering popping the Andre over this past October’s news that the 10th and Market Street luxury apartment complex NEMA was facing foreclosure proceedings. After all, what’s not to dislike about NEMA? The property was the poster child for the late 2010’s VC/tech boom, with its pool mermaid parties, attempts to whitewash San Francisco, and cringe-worthy promotional videos that even their tenants hated.

But lo, it appears there will be no foreclosure of NEMA. The Chronicle reports that NEMA’s owner Crescent Heights has struck a deal with its lenders to avoid foreclosure. There’s not much information about the terms of the deal, as the Chronicle simply says “The parties agreed to modifications in Crescent Heights’ loan agreement,” and that “details were not disclosed.”

And it seems like it was not a good thing, as the Chronicle also notes in their report, that Wells Fargo sued Crescent Heights last week over the building's mortgage debt. But Crescent Heights is spinning that lawsuit as a positive development, describing it as a mere “servicing procedure” that they say will help them out of this mess.

“Crescent Heights is pleased to confirm it has agreed in principle to a loan modification with its lenders, and that this filing is a servicing procedure while loan documentation is finalized,” a Crescent Heights spokesperson said in a Tuesday statement to the Chronicle. “We are grateful to our lenders and the servicer for working with us to put in place a long term plan that ensures NEMA San Francisco will continue to maintain its position as one of the city’s preeminent residential rental buildings.”

That, too, may be spin. Crescent Heights refinanced the building with a $384 million CMBS (commercial mortgage-backed security) loan in 2019, which was right before the pandemic, and the place has reportedly lost half of its value since. And as of summer 2021, the building was looking to convert 150-200 units to short-term corporate housing which indicates they were maybe having vacancy issues.

The Chronicle reports that NEMA currently claims a 90% occupancy rate. “Occupancy-wise we are running fine,” a Crescent Heights spokesperson told the Chronicle. “But the prices are way off from before COVID-19.”

Related: Mid-Market Luxury Apartment Tower NEMA, a Symbol of Last Tech Boom, Faces Foreclosure [SFist]

Image: RentNEMA

Lloyd Canamore gained fame in 2020 over a campaign to save his uniquely decorated West Oakland “Warriors House,” but he passed away recently, and an Oakland shelter is trying to rehome his dogs.  

The 2019-2020 NBA season was a forgettable one for your Golden State Warriors, as they won merely 15 games before COVID-19 arrived, and they were not invited to the “bubble” for the NBA playoffs. But there was still a feel-good story that united Warriors fandom that season, the saga of Lloyd Canamore and his West Oakland “Warriors House.”

Canamore painted and thoroughly decorated the house with Warriors colors and memorabilia years ago, but a bank tried to foreclose on the house over a reverse mortgage his mother signed without his knowledge.

A crowdfunding campaign to save the house that had been in Canamore’s family for more the 50 years raised nearly $300,000, drawing help from the Oakland Community Land Trust, and the campaign was shared by Steph Curry and even the Golden State Warriors social media accounts.

It does not appear the campaign worked, though. Canamore still moved out of the house in March, as Oaklandside reported at the time. And while the house’s auction was “postponed until August 16, 2023” according to the Land Trust, a Redfin listing for the house shows a sale of the house as “Pending,” saying “The seller has accepted an offer, and this property is now pending.”

To make matters more heartbreaking, KTVU reports that Canamore recently died, having passed away in late August.

Canamore is survived by his niece Victoria, and his two dogs Rambo and Baby Miracle. And Oakland Animal Services has taken the dogs in, and is trying to find them a new adoptive home.

“These two pups, who are surely heartbroken at the loss of their beloved human companion and their comfortable home, are finding the shelter quite stressful. We would love to find them a new home together as soon as possible - can you help?,” the shelter said in a Wednesday Facebook post. “We know that Lloyd was a beloved part of the Warriors family so we're sure there's someone out there who can make his family members part of their family.”

Oakland Animal Services’ adoption hours are Thursdays from noon-7 pm, and Friday-Sunday from noon-3 p.m., at 1101 29th Avenue in Oakland.

A memorial for Canamore is being planned sometime in October, though details have not yet been announced.

Related: Warriors Hook Up Veteran 36-Year Muni Operator With Free Playoff Tickets, Custom Jersey [SFist]

Image: dubscommunity via Instagram

On Friday, June 1, Occupy Bernal (the tiny Occupy group that, despite its size, somehow gets shit done) plans to stop the auction of Alberto Del Rio's house by making noise to drown out the auctioneer at City Hall, among other ideas. Why all the fuss? Occupy Bernal explains:

"Alberto Del Rio is a Bernal Heights resident who grew up in his family home. He lives there with his wife and 3 kids. To help his mother have a decent retirement, the Del Rio family took equity out of the home and refinanced. But their loan from World Savings was a Pick-a-Payment loan. Lawsuits have found these sorts of loans to be predatory. World Savings sold the loan to Wachovia, which was then acquired by Wells Fargo. “Wells took advantage of me. Like they did so many other people. They promised us the moon,” says Alberto, who has been trying to get a loan modification since 2000. The bank has continually lost his paperwork, and refused to negotiate in good faith. The bank even advised him to stop making payments in order to qualify for a loan modification, which triggered the foreclosure process. Now, Wells Fargo is scheduled to auction his home on June 1. But we won’t let them."

On the flip side, Wells Fargo Bank did donate a whopping $25,000 to aid the more than 20 small businesses that protesters vandalized during a May demonstration on Valencia. So, you know, there's that. Anyway, if you would like to join in on the Occupy Bernal action, it all goes down at 1:45 p.m. on the steps of San Francisco City Hall on Friday. Just please stop chanting "Hella, hella, Occupy." Find something new. Because you'll sound like a .... well, you'll sound like a dipshit.

For more details, please visit www.occupybernal.org.

San Francisco resident Mary Schmidt penned an eloquent open letter to Bank of America last week pleading with the bank to stop their plans to foreclose on her family's home. The letter quickly spread across Tumblr, Facebook, and Twitter, and ended up in the hands of influential Bank of America executives two days after she posted it.

As The Huffington Post reports, Mary's parents Noel and Maureen Schmidt, also of San Francisco, are both lifelong teachers who have encountered some challenges in recent years. Noel suffered from a stroke in 2010, hindering him from running his nonprofit, and Maureen's benefits and hours were cut in 2009.

The Schmidt family home of 23 years was set to go up for auction last Thursday, prompting Mary, a recent San Francisco State grad, to pen her "strongly worded letter."

Here's an excerpt:

Whenever my siblings and I walked through the front door of our house with tears in our eyes after a coach unfairly cut us from a sports team or a teacher treated us badly, my mom would always threaten that she was going to write him or her a strongly worded letter. My mom and dad, like most parents, hate seeing their children get hurt. Back then they saw the hurt in our eyes and wanted to make everything better.

Well, my siblings and I are all grown up now and we see the same hurt in our parents' eyes. We saw the hurt in their eyes as they struggled to figure out how to pay for an inflated mortgage payment. We saw the hurt in their eyes when, after a job loss, a stroke and increasing medical expenses became too much, they could no longer afford their mortgage. Now we see the hurt in their eyes after countless nights of losing sleep worrying about where they are going to live. Seeing this hurt in their eyes over the last year is what prompted me to write you, Bank of America, a strongly worded letter.

Fortunately, on the day of the auction, a case worker from Catholic Charities was able to get the U.S. Treasury to intervene and postpone the auction until March 21st, which allowed time for Mary's letter to makes its rounds.

Two days after posting the letter, she received a phone call from the office of the President and CEO of Bank of America. Here's what Mary had to say about it:

Called the nice lady at the CEO's office. She said that they had received my letter and are willing to work with my parents and drafted up an offer for them. She said it is in the mail, but couldn't disclose the details. When I asked her how she got my letter, she said it was sent up to her office through some high level executives who had received it. I don't know where it's going to go from here...but that's pretty awesome. Thanks again for all your support!

Congratulations to the Schmidt Family for making it this far. We'll update when more details come in.

[The Huffington Post]

A prayer vigil and rally is scheduled to begin at noon at the Federal Reserve at 101 Market St. today, calling for solutions to widespread foreclosures. Rev. Jesse Jackson, who is currently on a national tour promoting his nonprofit RainbowPUSH Coalition's campaign for mortgage relief for homeowners facing foreclosure, is scheduled to appear. Jackson and other religious and community leaders are putting pressure on lenders to restructure loans in order to avoid foreclosures.

Several rallies in Northern California happened today calling for lawmakers to help on a moratorium of foreclosures. ACORN (Association of Community Organizations for Reform Now) helped spark the protests, calling on all "mortgage lenders and servicers to implement a 90-day foreclosure moratorium and to use this time to modify loans to affordable terms for homeowners."