More people live in single-room-occupancy hotels than in all of America's public-housing projects. For a majority of these people, SROs are a step away from homelessness.
SROs house people who fall into the low- and very low-income category. Rooms in SROs rent for as little as $350 a month-$600 seems the average and $1,000 isn't uncommon. Rooms are anywhere from 70 to 220 square feet and may or may not include a private bathroom. In terms of what you get for your money, SROs aren't cheap. Add to this the fact that the buildings that house these rooms are often relics built in the early 1900s and would likely fail a thorough code inspection and might not make it through a significant earthquake.
SROs, however, remain the only alternative for folks on three-digit fixed incomes, seniors and the mentally and physically disabled who have no place else to go.
In September of 1985, the San Diego City Council put a moratorium on the conversion and demolition of SROs, citing a shortage of low-income housing, a consequence of the downtown's burgeoning redevelopment. The moratorium held until November of 1987, when the council adopted its first SRO ordinance, put in place to afford ousted tenants some protection. To prevent depletion of the city's SRO stock, the ordinance required a property owner who converts an SRO to some other use to build another SRO with the same number of rooms within three years or contribute money to the city's SRO-preservation fund. Later updates to the ordinance gave tenants 90 days to vacate—60 days more than state law mandates—and required owners to pay tenants two months' rent to cover moving expenses. The replacement provision has since remained the weakness in the ordinance and has been challenged in court.
Since the 1985 moratorium, the number of SRO hotel rooms in the city has only decreased, most recently by 298 when the federal government decided to expand its courthouse on the land occupied by the Hotel San Diego and the State Hotel. A third SRO, the 100-room Capri, also stands in the way of courthouse expansion and will close in August. The feds have pretty much snubbed the city's persistent demand that they pay for the lost housing.
As it stands, the San Diego Housing Commission estimates that skyrocketing property values downtown have placed at least six more SROs in danger of being flipped into something more profitable. Betsy Morris, chief executive officer of the Housing Commission, says that though 700 or so affordable units are currently being built downtown, they won't be much help if other affordable units keep disappearing. “While we need more [affordable housing], what we've been building isn't intended to replace what someone wants to take out of the market,” she said. “If someone takes 200 units out of the market, we need to do more; we need to replace those, too.”
The story of the Maryland Hotel only underscores this point.
Until last week, the six-story, 271-room hotel housed 206 people, the majority of whom get by on less than $1,000 a month, some existing on fixed incomes of less than $750. Five floors of the hotel rent by the month for between $400 and $500. The sixth floor, better kept than the others, but unworthy of a guidebook recommendation, is reserved for tourists.
On Dec. 30, two days before passage of a state law granting tenants the right to a 60-day eviction notice, Maryland Hotel residents found out they had 30 days to find a new place to live. The Maryland's owners, Michael and Richard Kelly, have said they hadn't planned to evict tenants so soon; in fact, they had wanted to wait until spring to serve the notices. But they claim that the City Council forced their hand by attempting to pass an emergency SRO ordinance in early December that would have required the Kellys to pay tenants up to $5,250 for relocation costs—around five times what the current ordinance requires. The emergency ordinance needed six votes from the nine-member council to pass but received only five.
If the ordinance had passed, the Kellys say they would have pushed for exemption based on a 1998 letter from the Housing Commission to the Maryland's then-owner stating that the hotel was not an SRO because rent at that time included meals. Housing Commission officials, however, call the letter irrelevant, made so by subsequent updates to municipal codes. Morris says the Kellys should have looked into this before they bought the hotel, not after.
During the coming year, the Maryland Hotel will get an interior makeover and structural retrofit. The historic façade of the 88-year-old building will remain. It will reopen in spring of 2004 as something better than it was—a one-of-a-kind upscale hotel with a hip ground-floor nightclub that will feature live music and acrobats. Maryland project manager Paul McNeil says the new hotel will generate an estimated $1.2 million annually in tax revenue for the city-money that, he says, can help fund new affordable-housing projects.
As property owners, it's the Kellys' right to do with the hotel what they want, and given the exponential pace of redevelopment, it was only a matter of time before someone bought the hotel for a more profitable use. But what was supposed to be a smooth transition into the hotel business for the Kelly brothers ended up a drawn-out battle with angry tenants unwilling to leave their home and city officials trying their best to make sure another SRO didn't slip away so easily.
What follows is a chronological account of the story of the Maryland Hotel.
Michael and Richard Kelly purchase the 271-room, 45,000-square-foot Maryland Hotel at 630 F St. in downtown San Diego for $8 million from Golden West Hotel LLP, owners of the Third Street SRO of the same name. Michael Kelly tells the San Diego Metropolitan magazine that the planned ground-floor nightclub “will be unlike anything San Diego has ever seen.”
Maryland tenant Donald Kock (pronounced “Cook”), who suffers from vascular necrosis and relies on a wheelchair or walker to get around, finds out about the change in ownership and decides to start looking for a new place to live for himself and his girlfriend, who is confined to a wheelchair. His search will last until mid-January, and his new place at the Island Inn will cost $200 more per month than what he was paying at the Maryland.
Aug. 29, 2002
The Centre City Development Corporation (CCDC), whose job it is to monitor downtown development projects, holds a public hearing to decide whether or not to grant the Kellys the permit needed to start work on the nightclub. CCDC staff decides plans for noise reduction and crowd control aren't satisfactory. They tell the Kellys to address these problems and come back the following week. On Sept. 3, the permit is approved.
Sept. 5, 2002
Jeni Lyn, a resident of the Maryland Hotel, files an appeal of CCDC's decision to issue the permit. “The Maryland Hotel is currently undergoing what I consider massive reconstruction,” Lyn writes in the appeal. “... Mr. Kelly tells of plans to turn [the hotel] into a tourist hotel at some unspecified time in the future.” Lyn believes that since the Maryland is an SRO, Kelly's stated plans should have triggered CCDC staff to intervene on the residents' behalf to find out whether hotel renovations will affect the people who currently live there.
The same day, Lyn writes a letter to Michael Kelly. She tells him that she has lived at the Maryland for four and a half years; before that she had been homeless for a short time. “I am truly grateful to be here,” she writes. “This is my home.”
In the letter, she indicates that Kelly has offered to find her a new place to live if she drops the appeal. Lyn, who gets by on a monthly disability check, concedes that Kelly's offer of relocation assistance would be ideal: “I do not have the time nor the emotional strength to deal with such a move,” she says. “I am, therefore, asking you to honor your ‘offer' and have someone professional help me relocate.” But, she writes, there's something telling her not to withdraw the appeal. “I feel the need to make sure there is a governing agency to make sure the right thing is done, should need be,” she tells Kelly.
Sept. 10, 2002 Maryland Hotel manager Trent Smith sends a note to Lyn: “It's vital that I speak to you before Sept. 14 or there will be no need to.”
Sept. 11, 2002 Smith sends another note to Lyn. “I have talked to Mr. Mix [manager of the Golden West Hotel] and he has agreed to reserve a room for you.... I also have someone set up to help you move when the time comes. So I've done what you requested,” he writes. He tells her that he'll talk to her tomorrow about what she needs to do to cancel her appeal.
Sept. 15, 2002
Lyn sends Smith a six-page letter. She informs him that she is distributing several copies of the letter to people she trusts, for her own protection. “Almighty God knows the truth of our conversations and will make sure that is adhered to,” she writes.
Lyn then recounts her Sept. 10 meeting with Smith at which he offered her a room at the Golden West Hotel and $1,100 for moving expenses, but with three conditions: she drop the appeal; if any other resident filed an appeal, the deal was off; and if she did not drop the appeal by Sept. 14, “there would be nothing” for her. Smith had also told her that her appeal of the CCDC permit was holding up the project at a cost of $10,000 a day. “The conversation was civil enough,” Lyn writes to Smith, “but I sensed an underlying threat.”
Lyn goes on to say that on Sept. 11, she informed Smith that she would continue with the appeal. He told her that the relocation deal she had wanted was off. “You were quite rude and, I felt, definitely threatening,” Lyn writes.
Lyn notes that she decided to check out the room at the Golden West anyhow, but found it far inferior to the Maryland: no closet, no private bathroom and not nearly as large. It's not what she wants, she says. Lyn says she now fears for her own safety and the safety of her friends at the Maryland. “I would like to believe in goodness; for the most part I do. There is, however, evil in this world and a very large amount of money is at stake.
“I am wondering,” she continues, “whether the appeal is the issue or whether there is very much more to it.”
Oct. 24, 2002
Lyn appears before the San Diego Planning Commission, which is charged with investigating the grounds of her appeal. In the meeting transcript, Lyn's testimony takes up 10 pages, which means she was granted much more time than the three minutes speakers are normally given. Planning Commissioner Carolyn Chase later described Lyn's speech in the San Diego Earth Times, which Chase edits. “I have heard emotional testimony before,” wrote Chase. “This testimony was powerful. She spoke... of a life broken by the challenges of mental illness and homelessness. She spoke of the difficulties of coping. The lights on the panels—[which] indicated that her allotted time was up-came and went and were ignored.”
“It would seem to me,” begins Lyn's speech, “that at this time I am a very little fish in a very big pond; a pond whose direction has already been determined, within which my probable destiny is on a rather unpleasant hook....”
She describes her attachment to the Maryland-the home she's made there for herself. She cites the city's SRO ordinance and the Kellys' obligation, both legally and morally, to replace the low-income housing that will be lost to the hotel's conversion. She addresses the hypocrisy of a city that declares a housing crisis yet ignores the consequences of progress. “There is no question that downtown San Diego, which was rundown and neglected, is a far more attractive place than it ever was before. But the reality is that it is home to many, many people who cannot afford to live in such an environment.”
In addition to Lyn's testimony, the commission heard a detailed presentation of plans for improvements to the building, which, project manager Paul McNeil told them, needs a “seismic upgrade.” He describes in detail the design and layout of the nightclub but is vague in discussing what will become of the residents. At one point, he says the hotel will stay as it is-transient occupancy on the sixth floor and long-term occupants on floors 2 through 5. “It will just be more lively at the ground floor,” he notes. Later he points out how noise mitigation from the nightclub “was designed with our residents in mind,” and tenants who think it's too noisy will be able to move up to the sixth floor.
The Planning Commission questions McNeil on plans to raise rent, and he admits the rooms are currently below market value and will probably rise. Then there's the following exchange:
Commissioner Steele: “I don't know if I'm allowed to ask. What about reports that you're going to turn this into a boutique hotel? Am I allowed to ask that? Are you going to turn this into a boutique hotel, Mr. Kelly?”
[Michael] Kelly: “Sure.”
Commissioner Steele: “OK.”
[Paul] McNeil: “I mean, that's the ideal. If we're-there's a whole other process, and, as I say, it's a whole other Oprah [episode] on that issue, and that's something the [City] Council's dealing with and with the Housing Commission.... If we're allowed to do it, it will happen. And if not, then we'll figure out a way to make it work as an SRO.”
“The tenants, we feel, are just a little bit vindictive,” Michael Kelly tells the Planning Commission of Lyn's appeal. “They're mad that we're going to be converting the property. They don't want to have to move and so they're trying to fight us in other areas that have no bearing on this hearing.”
Commissioners decided to continue Lyn's appeal until a representative of the Housing Commission was present. On Nov. 14, they voted 4-2 to deny her appeal on the grounds that the permit she was seeking to block applied only to the proposed nightclub and therefore had no bearing on the residence portion of the hotel. The Housing Commission would handle the latter issue when the Kellys applied for a demolition permit.
Though Lyn's attempt to block the beginning phase of the hotel's transformation failed, her efforts got the attention of the right people.
The day before the Planning Commission hearing, the Housing Commission's Morris sent a letter to the Kellys demanding they initiate the necessary eviction proceedings with the Housing Commission to insure tenants' protection. In return Morris gets a letter from Brian Fish of Luce Forward law firm. Fish tells Morris that, given the 1998 letter, the Maryland is not an SRO. He also says that he hopes she won't meddle in the Planning Commission's hearing on the permit, since it applies to “entertainment use” only.
With the holidays drawing near and the City Council on furlough between Dec. 11 and Jan. 6, the Housing Commission drafts an emergency SRO ordinance that would hold for 45 days. The interim ordinance, if passed, would give Maryland tenants, and any other tenants evicted from an SRO slated for conversion, up to $5,250 in relocation benefits rather than the two months' rent required by the current ordinance. On Dec. 10, the ordinance fails by one vote.
Dec. 12, 2002
Morris receives a letter from Michael Marks, attorney for 630 F Street. The letter informs Morris that tenants will be served 30-day eviction notices on Dec. 19 (the date later changes to Dec. 30). He also tells Morris that his client doesn't plan to comply with the city's SRO ordinance-specifically, giving tenants 90-days' notice and replacing each SRO unit set for demolition. Tenants will, however, get two months' rent to cover moving costs.
In his clients' defense, Marks cites the Ellis Act, which, he notes, says government agencies can't force an owner of a residential hotel to stay in the residential hotel business. Requiring someone to build replacement units would do just that. The Ellis Act argument prevailed in a 1999 lawsuit against the city of San Francisco, a case that Marks points out in his letter to Morris.
However, as a CityBeat investigation revealed, as recently as June of last year, a San Francisco SRO owner who converted his hotel for tourist use was forced to pay $1.3 million to nonprofit housing agencies and $100,000 to a senior housing program in lieu of replacing the lost SRO units. And, as Judge Ronald Prager ruled Monday, Feb. 3, the Ellis Act holds little weight in cases where it may cause irreparable harm to low-income folks, such as diminishing their chances to find decent housing.
Dec. 30, 2002
Exactly 206 residents of the Maryland Hotel are issued eviction notices, informing them that they have 30 days to get out. If they're out before Jan. 29, they'll get a $100 bonus. Tenants find this offer laughable considering their rent went up $100 on Dec. 1. “Happy New Year,” says resident Caryl Foster of the notice tacked to his door.
Jan. 13, 2003
Foster organizes a press conference in front of the Maryland Hotel. Twenty or so residents line up behind him holding signs emblazoned with their new rally slogan, “Why is the city of San Diego creating the new homeless?” Afterward, they march two blocks to The Bitter End, the Kellys' Fifth Avenue nightclub. It's slow-going considering one of their group moves with the aid of a walker, and they try not to leave her behind. In front of The Bitter End, a Vietnam Vet who lives at the Maryland holds up an ID card with the words “Disabled Veteran” in red. Originally from Italy, he speaks with a heavy accent. “This is America?” he yells, waving his card.
A blonde woman walks by with her dog. She edges past the group, most of whom are elderly, disabled or mentally ill. “What is this crap?” she sneers.
Jan. 17, 2003
Richard Lawrence of the San Diego Affordable Housing Coalition organizes a meeting at the Salvation Army chapel, which sits adjacent to the Maryland. He's brought in representatives from Legal Aid, Senior Services, the Housing Commission and the St. Vincent de Paul shelter. A representative from Telecare, which houses 250 homeless mentally ill, says all Telecare's beds are full but she'll do her best to make room for mentally ill Maryland residents.
The tenants who've filled the small chapel complain that they haven't received their relocation checks, others aren't sure what they need to do to get those checks and a vocal few attack the city for not enforcing the current SRO ordinance that mandates a 90-day notice.
“We've got 12 days to find a new place to live,” says one tenant, wanting to know why the city can't get them more time.
The Housing Commission's Susan Tinsky tells the tenants to make the best use of the time they have left. She waits until later, when she can talk to tenants individually, to explain that the 90-day provision in the ordinance is out of compliance with state law, which supercedes local law. The eviction notices that went out on Dec. 30, demanding everyone be out in 30 days, were perfectly legal. Should 630 F Street have waited a couple days longer, until Jan. 1, when state law changed from 30 days' to 60 days' notice, tenants would have had until the end of February.
Donna Curty, who lives at the Maryland with her boyfriend, says she just wants her relocation check. She moved to the Maryland after the Hotel San Diego was closed to make way for the courthouse expansion. She says she's tired of constantly having to pack up and move.
Jan. 25, 2003
Twenty or so housing advocates dress up in boxes and march from the Maryland over to The Bitter End amid the Gaslamp's Super Bowl brouhaha-a brave move on their part. Their chant, “What do we need? Housing! When do we need it? Now!” is bastardized by intoxicated football fans that replace “housing” with “Raiders to win” or “beer.” Outside The Bitter End, an inebriated young man with a fist full of money starts throwing crumpled bills at the protestors. “Get a job!” he yells.
Jan. 28, 2003
A group of clergy, housing advocates and a couple Maryland tenants wait around at a City Council meeting for the last agenda item of the day—an 11th-hour hearing on another emergency SRO ordinance that, if passed, would, at the least, give Maryland tenants another few thousand dollars each for relocation expenses. While he waits for the hearing, Maryland resident Andy Cash looks over a list of SRO vacancies given to him by Paul McNeil. Cash has already checked out most of the places on the list. “Worst scumbucket places San Diego ever had,” he says. “I've seen jail cells that are better.” He points out two hotels that he says are pretty decent, but at $200 a week, plus a 12 percent occupancy tax, he can't afford either. “You either go up, or you go down,” he says—and anything after the Maryland, he predicts, will be down.
Another drawn-out debate of the Chargers contract fiasco pushes the hearing to close to 6 p.m. The local news media that had earlier crowded around Chargers consultant Mark Fabiani have left. Only one cameraman and one reporter remain. Councilmembers, having been called into a closed session hearing 15 minutes prior, return to their seats. Deputy City Attorney Les Girard explains that the City Council, under threat of litigation from 630 F Street, has, by a 7-to-2 vote, accepted a settlement offer of $300,000. In exchange, the city agreed that the Maryland's new owners have satisfied all the provisions of the SRO ordinance, or, as Girard puts it, “SRO regulations, with respect to the application to the Maryland, have been satisfied.”
The cameraman and the reporter slink out a side door.
Council gadfly Mel Shapiro asks to be heard and keeps it brief: $300,000 is a sparse amount compared to the estimated $5 million to $8 million it would have cost the Kellys to replace the lost SRO units, Shapiro points out.
Councilmember Toni Atkins, who, along with Councilmember Donna Frye, voted against the $300,000 settlement and has established herself as the council's leading advocate for affordable housing, later expressed her disappointment in the settlement. The council, she said, had been advised that there was a chance neither the current ordinance nor the emergency ordinance would hold up in court. “Our attorneys advised us we would be taking a risk [in upholding the ordinance],” she said, “but I think it would have been a risk worth taking. Our ordinance is meaningless in terms of replacement unless it's tested in the courts.”
Atkins said a new, permanent SRO ordinance will be drafted in three to six months with the input of affordable housing advocates and SRO owners.
As for the 630 F Street crowd, she had some choice words. “There was no compassion or ethics involved here from the get-go,” she said. “You do not spend $8 million on a property and not know what the restrictions are on that property.... They orchestrated this. They have the best attorneys. They wanted to get the people out of there before they had to meet the intent of state law of 60 days. Then they think they're giving significant relocation to these people? Having seen the list of what's available [for rent], that's laughable.”
Jan. 29, 2003
An elderly man stands curbside in front of the Maryland with a wheelchair and cart of stuff. He's waiting for a taxi, he says. He's found a new place to live, but he won't say where. “The media these days-you don't inform, you just influence,” he quips before getting into the cab. Inside, a couple residents are wheeling their possessions out in large, filthy hotel laundry containers. Upstairs on the fourth floor, the dimly lit hallway is a mess of trash bags and years of accumulated possessions. A maid walks by and groans at the sight. A cockroach skitters out of an open storage closet.
Tenants flock to Connie Pujols, who's lived there since 1987, hoping she's got some answers. “You can see the panic,” she observes as she walks from room to room to check in on her neighbors. A woman named Angie runs up to Pujols. Angie says she hasn't received her relocation money yet, and she doesn't want to end up with an unlawful detainer. “I'm running on raw nerves,” she says. She adds that she might have to take her 5-year-old daughter Diane to a nearby shelter that night. Right now, she and Diane are putting their stuff in storage as fast as they can.
Pujols' main concern is Fred Quinn, a pallid man who looks to be in his 70s. Quinn holds a key to Maryann Pell's room. She's in the hospital at the moment, badly in need of a liver transplant, he says. Against doctor's orders, she's checking herself out to make sure the items in her tidy room are properly taken care of. Quinn says he's going to put their things in storage and then maybe the two will find a room at the YMCA. “I'll always take care of her,” he says of Pell. “That's my favorite lady.”
Among the hotel's remaining 34 tenants, rumors abound: rooms will be locked at noon; possessions will be thrown out; maintenance workers have been observed stealing things left untended. Around noontime, a fight breaks out between two tenants and maintenance workers they accuse of theft. Someone calls the police and the tenants are cited.
Around 2 p.m. Housing Commission representatives Bobbie Christensen and Daniel Morales show up at the Maryland to make sure tenants know that earlier that day a judge ruled they could stay at least until noon on Monday—a five-day reprieve. Christensen and Morales also distribute flyers for a meeting later that evening at the Salvation Army where tenants will be told how to claim their share of the $300,000 settlement. At 3 p.m., Christensen puts in a call to the Housing Commission offices asking if they can send over a couple more people because, based on what she's heard from the remaining tenants, she doesn't want them to be left alone.
At 3:15, CityBeat and a Union-Tribune reporter leave the Maryland lobby. Shortly after, Paul McNeil, who stopped by to make sure residents were moving out in a timely manner, asks Christensen and Morales to leave as well. The owners, he tells Christensen, don't want the Housing Commission in the building.
The following day, Betsy Morris receives a letter from 630 F Street attorney Michael Marks. The letter accuses Housing Commission staff of telling tenants they have an extra 60 days to vacate, a charge Christensen vehemently denies. “We believe,” writes Marks, “it is more than a coincidence that approximately 20 tenants moved out before 2 p.m. [Wednesday], when your staff arrived, and none moved out for the rest of the day.”
Feb. 3, 2003
Judge Prager rules in a preliminary hearing that in giving Maryland tenants only 30 days to find a new place to live, 630 F Street did not comply with the city's SRO ordinance. Prager gives the roughly two-dozen remaining Maryland residents at least two more weeks to stay. Another hearing is scheduled for Feb. 18. As this story went to press, the Housing Commission, which distributed the first round of settlement fund money last Friday, had received the names and forwarding addresses of only 65 of the 206 tenants from 630 F Street. The settlement demanded that the names of all tenants be turned over to the Housing Commission.
The Housing Commission asks that anyone evicted from the Maryland Hotel on Dec. 30, 2002 call 619-578-7699 to find out if they are eligible for settlement funds.