Historic building weathers grocery owner, former Facebook exec

After years of disrepair and neglect, a historic building at 18th and Mission streets is in the process of trading ownership from a former Facebook executive to a commercial developer. Once a hub of the Mission’s Miracle Mile, the building may now become a dialysis center.

Mike Conn, senior vice president of Meridian Property Company, a commercial developer based in San Ramon, confirmed his company is in negotiations to purchase the property, which has been empty for more than ten years.

“We are in escrow to purchase the property,” Conn wrote in an email, referring to the step before a final closing.

Constructed in 1911, the building at 2205 Mission Street housed appliance and furniture stores during the heyday of the commercial district known as the Mission Mile that bustled along Mission Street in the 1950s. A dialysis clinic now has plans to move in.  This is the story of how two  earlier owners failed to accomplish the plans they envisioned for 2205 Mission St.

Conn, who has met with the Department of Building Inspection and the Historic Preservation staff at San Francisco Department of Planning, has no illusions about the process ahead. He gave no date for work to begin on the building, stressing that Meridian has “a long approval process with the City, the community, and our Tenant.”

A medical clinic will be the third proposed use for this building. Two previous uses – an organic grocery store and a vegan restaurant and brewery – were proposed by the building’s last two owners – first the grocery store owner Guadalupe Hernandez, and later an LLC involving Owen Van Natta, a former chief operating officer of Facebook.

But after seven years of troubled property management and intermittent construction, the damaged building remains empty as complaints and violations pile up.

“I don’t know what’s happening over there. But it doesn’t look good,” said Howard Ngo, whose grocery store Duc Loi sits directly across the street from the building.

Ngo purchased his property in 1991. It was a mess: needles, trash and feces were everywhere, Ngo said. He and his wife Amanda cleaned it up and opened a produce market, later adding a 28-unit apartment building.

Ngo said that the owner of the property at 2205 came in to seek his support a few years back.

“I asked him if he’d done this kind of thing before and he said no,” said Ngo. “He was a tall guy. Nice. But I haven’t seen him since. I tried to get in touch with him, to ask what was happening, but got no response.”

Van Natta owns multiple properties in the Mission District, including 2205 Mission Street, which is managed by Tom Van Loben Sels.

Sels is a founding partner of Apercen Partners LLC, a tax-consulting and wealth management firm in Palo Alto. Requests for an interview sent to 2205 Mission Street LLC went unanswered as did attempts to reach Van Natta.

Mismanagement of the historic building, however, started before Van Natta purchased it. In 2010, Hernandez, who owns other grocery stores, purchased the building, formerly the 99-cent Depot store, and filed a permit to open an organic grocery store. In the application he described the building as having a stucco exterior.

Department of Building Inspection staff called that description “misleading,” according to a Department of Inspections document.  It obscured the existence of historic tiles, which had been put on in 1937. The tiles had been painted over by the building’s previous owners in the years before the building achieved historic status.

In a 2010 application to put the neighborhood on the National Historic Registry, the city writes: “Among the most impressive examples of Modernist architecture were the Streamline Moderne remodel of the older commercial building at 2205 Mission Street with iron enamel panels, rounded corners, and a marquee/tower sign.”

That same year, neighboring merchants filed a complaint with the building inspection department, which found that the building was listed on the city’s roster of historic buildings and issued a violation notice to Hernandez, stopping all work on the building and ordering that he restore the original exterior. This restoration never happened.

In February of 2014, Hernandez sold the building to Van Natta for $5 million and the building’s permits changed to reflect the vision of the new owner. The plan was to make it  the permanent home to Citizen Fox, a “full service brewery and restaurant.”  In a 2016 piece by Lauren Smiley on Mission Street, Van Natta’s broker – and later property manager – Bennett Mason described Van Natta’s vision for his Mission properties:

“His idea is a cool thing, contributing to the community and doing something that would make his two daughters proud,” Mason said at the time. But the building’s troubles continued.

Between December 2014 to March of this year, four complaints, and three notices of violation were filed against 2205 Mission Street LLC. The complaints came both from Mission Street merchants and the Board of Supervisors. Workers were doing work “in a dangerous manner” that went “beyond the scope of permit,” the complaints alleged.

According to the first complaint in December, 2014, workers erected unsafe scaffolding, removed paint from the metal trim on the building, and were dropping “side panels” in an unsafe manner.

Building Inspector John Barnes visited the site three times between December 18th and December 29th, halting work on his final visit, and issuing a notice of violation. Barnes issued a second notice in February, 2015. Matters appeared to come to a head in June when Mason appeared at a hearing to explain the lack of progress on the building and lack of compliance with the first notice.

In a recording of the hearing, Mason can be heard blaming the planning staff, alleging that “no one at Planning” – presumably the historic preservation staff that he’d been working with for nine months – wanted to sign off on further work. “It’s a quasi-historic building,” he says in a tone of voice clearly indicating sarcasm “as are all buildings in San Francisco. We have to restore it to the way it was in built in the thirties,” he said.

Material to restore the exterior was being shipped from Tennessee, he said. In the meantime, he’d directed a worker to remove paint from the metal trim that wrapped around the building. “I didn’t think a permit was required,” Mason said at the hearing, arguing that the historic preservation staff had told him to remove the paint.    When Inspector Barnes visited the site and stopped the work, he says at the hearing, “The painter got in a fight with the inspector. And that’s why we got a notice of violation.”

Mason was given 30 days to remedy the violations. Within two months, more complaints were made, one by the Board of Supervisors, and another by an anonymous person who complained about pieces of glass hanging precariously from the second floor and an unsecured entrance on 18th street.

The most recent complaint was made last month by city planner Dario Jones, who described the building as an “abandoned and derelict structure.” He noted in his complaint that SF Planning had issued a permit to restore “unauthorized façade work” back in 2015.

“Today, the property remains out of compliance,” Jones wrote in the same complaint.  Since then, a third notice of violation has been sent to 2205 Mission Street LLC. At least one more was issued this month for broken windows hanging over the right of way, according to Inspector John Romaidis.

In February in 2016, Citizen Fox announced it would not be opening at 18th and Mission as planned, after briefly operating in a smaller location at the other end of the block. Deborah Blum, founder of Citizen Fox and co-owner of several restaurants in San Francisco, noted the glut of restaurants in the Mission – “The restaurant environment in San Francisco is a bit saturated.  Expenses are incredibly high and there is such strong competition,” Blum wrote in an email.

Blum also cited dissatisfaction with San Francisco’s Planning Department, stating that she thought the time to secure new permits was “extraordinarily long.” She added that her “boss” – presumably Van Natta owned the building – had decided to sell it.

Building inspection records show that two building permits that were never paid for, including one permit in May of 2015 that was filed to comply with the violation notices. According to Joe Duffy, senior building inspector, paying for the permits is the final step in the application process.

“You start on the first floor, work your way up and leave through check out,” Duffy told me in his office, “check out” being the Central Permit Bureau. The department sees applications for at least 66,000 permits each year.

Accordingly, the Department of Building inspections must operate, at first, on trust.

“We have believe that people are going to do the right thing,” Duffy said.

It’s unclear why the property has fallen behind on compliance. Money is likely not the issue – Van Natta, a current director at Boku mobile payments, was included in Fortune’s 2011 “Highest Paid Men” list.  The 2205 LLC has paid $2,052.96 in fines, according to city records.

One owner who has property nearby and asked for anonymity says Van Natta approached him last year with a request that he sell his property, said the fines weren’t enough to provoke action.

“I told him I didn’t want to sell my property. And I don’t really know why he wanted it,” the business owner said. “What is he doing with his own building? It’s just sitting there.”

He cited Van Natta’s wealth as a reason for inaction.

“A couple of thousand of dollars in fines isn’t going mean anything to that guy. He can just pay the fines and let his building sit there. The rest of us can’t afford to ignore the city,” he said.

Both this man and Ngo expressed the same sentiments about working with the city: It’s not that hard. Ngo, who arrived in America in the mid-seventies as a refugee from the war in Vietnam – “I’m a boat person,” he told me proudly – worked with the Planning Department when he bought his property.

“I took a lot of risks. But the people in the planning department were very helpful, very nice. I would like to tell the owner of that property that he should work with the planning department. The neighborhood would look better,” Ngo said.

The other property owner agreed.

“When you get into the business of buying properties on Mission street, you know what you’re getting into. It’s like driving in traffic: You know there’s traffic lights. It’s the same thing with historic buildings.”

“I wish this man the best. But I hope he can find a solution,” Ngo told me, adding that he wondered if the owner didn’t have enough money. “My customers have asked me about the building. I don’t have anything to tell them. I don’t know why he lets it sit.”