Five Mission District properties placed into receivership
Another domino this week fell in the bizarre case of Anne Kihagi, the woman who quickly and ruthlessly laid claim to the title of San Francisco’s cruelest landlord — prompting the question of just how many dominoes she has left.
A judge on Monday admitted that “ordinary remedies are inadequate and ineffective” in dealing with Kihagi, and took the extreme step of wresting away her eight known remaining residential properties and placing them under the control of court-appointed receiver Kevin Singer. Three other former Kihagi properties, tied up in a lawsuit with Umpqua Bank, had previously been placed into receivership under Singer and sold.
At issue was Kihagi’s monthslong violation of the terms of a court injunction — namely that she hire a property manager who was approved by the city and address the rampant health and safety violations in her numerous buildings. None of this occurred, prompting Judge Charles F. Haines to move the properties into receivership for what he described as “intentional” violations of the injunction.
On top of all that, Haines dinged Kihagi for an additional $470,000 in fines, which is added to a tab now exceeding $7 million. That gaudy bill is the result of her years-long campaign of wrongful and fraudulent evictions and scores of instances of unwarranted and substandard construction on her many properties — which earned her the nickname of San Francisco’s “cruelest landlord.”
“Our office fought hard to get a tough injunction to protect San Franciscans from Ms. Kihagi. She refused to obey that court order, but she is not getting away with it,” said City Attorney Dennis Herrera. “With the court appointing a receiver to take charge of her properties, these buildings are going to get the safety fixes they need, and the residents will no longer have to suffer from Ms. Kihagi’s predatory tactics.”
Between 2013 and 2016, Kihagi-controlled LLCs scooped up at least 11 San Francisco buildings for some $30 million. Kihagi’s M.O. was to buy rent-controlled structures at prices reflecting their constrained potential rental income — then systematically empty the buildings of their oft-elderly or disabled tenants and bring in new, market-rate renters. She could then borrow against this enhanced revenue stream, obtain new properties, and begin this process anew.
In May 2017, Judge Angela Bradstreet found for the city and against Kihagi in a jaw-dropping 163-page ruling. Bradstreet wrote that Kihagi and her family members, employing a morass of LLCs, engaged in an “egregious and ongoing” pattern of unlawful conduct, and levied $2.7 million in fines upon them for 1,612 separate violations.
Kihagi appealed that ruling — but, in March 2019, a judge once more found against her. Not only was she on the hook for growing fines compounding at 10 percent interest rates, the terms of the court’s injunction against her became enforceable upon completion of the appeal. That set in motion the process that came to fruition on Monday, with the courts essentially taking over her remaining known housing inventory.
Five of the eight properties involved in this case are in the Mission: 1135-39A Guerrero St.; 3947 18th St.; 69-75 Hill St.; 3328-3330 26th St.; and 1378-1382 Alabama St.
Rent money from the dozens of tenants residing in the eight Kihagi structures will now go to receiver Kevin Singer, who will hire managers for the buildings. Singer will also control any proceeds from the sale of the structures, if he opts to move them. Should this come to pass, a long line of creditors will collect their share prior to Kihagi receiving any money.
Kihagi, additionally, will be on the hook for the potentially significant federal capital gains taxes stemming from the proceeds of her buildings’ sales — and, recall, three have sold already. She is, purportedly, responsible for these taxes even if the proceeds of those sales are completely absorbed by creditors, liens, and paying down the growing legal penalties and attorney fees owed to San Francisco.
Dale Duncan, a former Hill Street tenant of Kihagi’s, in 2017 won a $3.5 million wrongful eviction ruling against her in what was ostensibly the largest-ever judgment involving one unit. He is one of the many people waiting in line for a theoretical payday.
A judge later reduced that award to some $2.7 million (Duncan is appealing). He confirms he “hasn’t seen a dime.” Regardless, this most recent ruling gave him hope.
“I guess it’s just nice. This puts some order into the universe,” he said. “It’s good to see this actually kind of resolving on the side of justice in some way. Her hubris was just mind-blowing.”