Though no one's lived in it for nearly five years, the Hotel Churchill's still included in a city of San Diego guide to affordable housing.
Perhaps it's wishful thinking.
The 100-year-old former hotel with an Excalibur theme was supposed to re-open on Jan. 31, 2009, totally rehabbed and with 57 of its 92 units renting for an amount affordable to single adults earning less than $30,000 a year.
Now more than a year past that deadline, the building's still vacant and the San Diego Housing Commission—the city's housing-services arm—is taking the Churchill's owners, J & J Properties, to court.
“There's a lot of homeless people around and people who can use this housing, and we need to move forward to try to get it,” said Housing Commission attorney Chuck Christensen.
Under city law, a property owner can't remove a single-room occupancy (SRO) hotel—often considered the housing of last resort for people on low, fixed incomes—from the rental market without replacing the lost units. A 2003 state law that patched some holes in local SRO ordinances gave owners a one-time chance to exempt themselves from such “replacement” ordinances; the Churchill, however, was one among a handful of SROs that either wasn't aware of, or opted not to take advantage of, the exemption.
So, when the hotel's owner started asking tenants to leave in fall of 2005, reportedly threatening to lock the doors if they weren't out by a certain date (see “S-R-uh-O” in the Nov. 2, 2005, issue of CityBeat), the Housing Commission intervened. In January 2008, both parties reached an agreement: J & J Properties could move forward with plans to rehab the building as long as 57 of the 92 units were set aside for low-income folks. And, the agreement said, all work was to be completed within a year and to the Housing Commission's satisfaction. To secure the agreement, a $4.2-million deed of trust was recorded against the property. Should J & J fail to deliver, the agreement said, it would have to pay the Housing Commission that full amount.
According to Housing Commission staff reports, between June 2008 and September 2009, J & J asked for three time extensions, citing problems with the hotel's elevator and difficulties securing funding to complete the rehab. In December, after a project-status review found that J & J didn't have enough money to finish the project, the Housing Commission gave J & J until Feb. 14, 2010, to find additional funding. J & J came back asking for more time and, among other requests, a loan from the Housing Commission. The commission said no.
“The [commission] board said, ‘We've bent over backwards here trying to work with these guys, and there's always an excuse,'” Christensen said. “The commission feels that… as a public entity [they've] done everything they're required to do to try to work with these folks, and now they just really need to move forward to make this affordable housing.”
On Feb. 23, the Housing Commission sent J & J a notice of default and gave the company 30 days to respond.
“They didn't do anything,” Christensen said, “including even contact us.”
CityBeat tried to get in touch with both J & J and its parent company, Burni Enterprises. Of the two phone numbers listed, one number had been disconnected and the other wouldn't accept incoming calls. Kelly Cox, J & J's attorney, didn't return a phone call by press time.
J & J, meanwhile, has asked San Diego Superior Court Judge Ronald Prager—the same judge who presided over the case that resulted in the replacement-housing agreement—to issue a restraining order against the Housing Commission to block foreclosure on the property. Should the judge deny the request, Christensen said, the Housing Commission will move ahead with foreclosure.
“If we went to a sale and we got $4.2 million for the property, then basically we'd be done,” he said. “But if nobody bids that amount of money at the sale, then the commission would become owners of the property.”
Christensen said that pending the judge's ruling, it's premature to talk about what the commission might do in either situation, but the point is to provide affordable housing.
The Churchill was recently included on a list of proposed supportive-housing projects put together by the Centre City Development Corp., the city's Downtown redevelopment arm.
“We thought that if that property ever were to come back into the control of the Housing Commission, it might be a great project for CCDC to work on collaboratively with the Housing Commission,” said CCDC Vice President Jeff Graham, “to do a rehab and maybe make all or some of those units supportive units to help with our homeless problem Downtown.”
Graham said it's CCDC's goal to add 500 supportive units—housing that comes with social services—to Downtown. “And any portion of that project that could become permanent supportive [housing] would certainly go a long way.”
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