The fire-ravaged former home of the 3300 Club bar and a 28-unit residential hotel is back on the market for $3.15 million, according to Erik Murray, the managing partner of a real estate company that bought the building two years ago with plans to renovate it.
He did not comment on why he was selling.
Oak Funds bought the building in September 2017 for $2.85 million. Its longtime owner, Dipak Patel, placed it on the market following a 2016 fire that gutted the building and displaced scores of residents living in the Graywood Hotel, a single-room-occupancy establishment that occupied the second and third floors.
The 3300 Club bar, which had operated on the ground floor for six decades, vacated in early 2017 after Patel declined to renew its lease.
Oak Funds had been planning to “rehabilitate and restore the previous uses” of the interior, including the 22 residential hotel units, the six tourist hotel rooms, and the ground floor space, according to Planning Department records. It would have had to offer the 22 units back to its previous tenants at the same rent, per the city’s Rent Ordinance.
The real estate company was also planning to install a rooftop deck. “The Project will provide the building’s tenants with 2,354 square feet of open space on a roof deck that was previously un-utilized,” said a February 2018 application.
Amy Beinart, a legislative aide for Supervisor Hillary Ronen, said her office was happy when Oak Funds proposed restoring the existing building with the low-income SRO units — and was enthused to hear that it would happen quickly. “And then it dragged and dragged and dragged,” Beinart said. “It was frustrating.”
Ronen’s office had been meeting with Murray and discussing the community’s priorities, she said. But then communication dropped off just before the summer of 2019. Which is unfortunate, Beinart said, because the office has been “actively working to bring the corner back” and preserve the “precious SRO units.”
“I think they thought there would be community opposition and they didn’t want to move forward,” Beinart said. Murray declined to comment.
Mark Kaplan, a real estate agent with Mission-based Rockwell Properties, said that the building, located at the corner of Mission and 29th Streets, could sell quickly. “My instinct is that the biggest obstacle to any building or development is tenants,” he said. “If you have a building that has no tenants, you remove that whole factor.”
As the building is not protected from demolition due to any historic status, “then it’s someone’s dream,” Kaplan said.
Even if a building is sold and renovated, however, residential tenants in rent-controlled units have, under city law, a “right to return” to buildings they were displaced from by disaster, at their pre-displacement rent.
Yet it’s unclear whether the units would have to be re-offered to tenants if a building is demolished and completely reconstructed from the ground up — a question similar to that of a building that burned down at 22nd and Mission. But Deputy Planning Director Jeff Joslin said that if a building was to be completely demolished and an entirely new building was constructed in its place, nothing in the city’s planning code requires a developer to give “first right of refusal” to tenants of the previous building.
Nevertheless, Michael Nolan, a longtime Bernal Heights resident and neighborhood historian, said the building and the bar have always been an important part of the corridor. “There’s always been a great appreciation for its history and its architecture,” he said, noting that some buildings on the street have mimicked its architecture.
“I hope the historic structure can be restored as much as possible to its grandeur and historical importance,” he said. “And I hope the former residents’ units can be rented and sold at an affordable price.”
If this is true, “residential tenants in rent-controlled units have, under city law, a “right to return” to buildings they were displaced from by disaster, at their pre-displacement rent,” what would motivate the owner to rebuilt or fix the building? Over time, the building stock in the City would deteriorate, and there would be even less housing than there is now. Stupid and wrong.
Exactly, Marc. It is a good example of how laws designed to help tenants often end up harming them. Some would suggest that rent control as a whole is like that, as it demotivates owners from offering units for long-term rents and motivates owners to repurpose their units.
I thought tat MEDA was going to develop it.
The previous owner was likely asking too much for it (it needs a ton of work) and MEDA passed on it. Maybe they’ll give it a second shot?
This building requires way to much work — and makes absolutely no sense whatsoever if one must rent it at super low “right-of-return” rates.
The only way to save/restore this building and return it too its low-income occupancy would be for an affordable housing developer like Mission Housing or MEDA to somehow acquire it and rehabilitate it with a massive infusion of public fund$.
Otherwise, the building, being largely exposed to the elements will continue to deteriorate and will ultimately need to be demolished and the site entirely redeveloped.
Funny how your comment is almost identical to one posted by “Kraus” on another site.
If “almost” identical then there is a probability this “Kraus” resides in a building flanked by long term vacant rental units. Perhaps my observation on the housing shortage being exacerbated by price and restriction controls is not limited to my immediate location.
I’ve only ever posted to Mission Local.
Inspired by Mr. Eskenazi’s excellent journalistic/investigative/observational skills and his interactions with commentators.
No — it’s the comment left by “Kraus” that is almost identical to another comment left by “Karl.” In other words, they are likely the same person. (And not named “Kraus” or “Karl,” either.)
Agreed.
Sit for years and ultimately be demolished.
As for “owning property — especially property devoted to sheltering people — should be subject to more particular restrictions”.
More restrictions?
As we put on more and more restrictions – the rent goes higher and higher but mention of this correlation is verboten in our “progressive” circles.
Case in point is the Jane Kim law where a landlord cannot limit the amount of people living in an accommodation.
Mom and Pop landlords are getting out of the rental business.
To the left of us is a building with two enormous 3 bedroom flats in excellent condition. Vacant for the last six years. Owner will not rent.
To the right is three unit building with the owner living in one – doesn’t need the money or the hassle of renting out the other two units.
Next rental down the street – AirBnB with a 30 day minimum stay to get around rent control.
If you looked at just this small sample one might come to the conclusion there is no housing shortage at all.
Rent control has finally gotten to the point of killing the small time landlord business.
Tenant protection is needed – but to a rational degree,
Where we are at now is evil TIC flippers Ellising newly acquired properties and simply throwing people out on the street for a quick mega-profit. Cause -you know – outta control rent control.
Why is there no mention of the taqueria el Taco Loco that was there for 30 years???????????
What’s the story with Cole Hardware, destroyed in the same fire ? Owners said at first that they planned to re-open.
Customers who must now trek downtown or to the Haight to avoid enriching Lowe’s, beg MLL please find out!
Of course nobody is going to want to take on this project if they’re required to rent out the units at rents that are way under market. This is just another example of where the city BoS and the Planning/Building department are way out of synch. The planning department will require all kinds of expensive upgrades — earthquake retrofit, extremely costly fire sprinkler systems, exorbitant construction parking fees and permit fees, months (if not years) of red tape and byzantine bureaucratic roadblocks that will cost a fortune — but then the new owners will be required to rent the units out at 1970’s rents. Well of course they dropped the project! San Francisco do-gooder progressives are so focused on their progressive agenda that they disregard all the actual practicalities of getting things done.
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It’s just a bad situation entirely. If a fire displaces rent-controlled tenants, and they can’t come back under the same rent controls, that just encourages bad landlords to torch their own buildings — not something anyone wants. On the other hand, if there is an actual accidental fire, do we not want the owner to rebuild to current codes? For that matter, would anyone, as a building owner, not want to build to current codes (even if it was somehow allowed to grandfather in decades-old standards)? Seems to me that would just be asking for a lawsuit at best, or a tragedy at worst — because those horrible fire sprinkler and earthquake standards are in place to save lives.
In theory, if the property was properly insured, the owner could rebuild abiding by current standards, and still rent out to previous tenants at previous rates — and at least come close to breaking even (on an asset that will continue to gain value just by sitting there). In practice, it won’t be that simple. But in practice, because people displaced by fire need to find new homes someplace, before their former homes are rebuilt, many of those persons won’t actually be willing or able to move back to their rebuilt homes. Ever heard of a landlord in SF offering a lease that can be broken when the renter’s previous apartment becomes available again? Or a landlord waiting around to see if their previous tenant was able to get out of their new lease to move back in? All of these horrible ‘protections’ only work if the displaced tenant has a way to temporarily live for however long the landlord takes to restore the place. In the real world, I’d say it rarely happens.
I agree that progressives sometime forget the practicalities of the real world. But another part of the real world is that real property — real estate — is a finite thing, and as such should not be under any one person’s control without restriction. We could take the extreme point-of-view that all property is property of all. Or we could take a much more modest approach, and recognize that owning property — especially property devoted to sheltering people — should be subject to more particular restrictions, restrictions that reflect the common good. Owning the places that people live in — where they set up households, where they raise families, where they live — comes with particular advantages as well as particular responsibilities. If you are not willing to take on those responsibilities, you should not become a landlord.
(It’s funny how much some owners of real estate like to talk about the real world, without actually considering how removed they are from what some people face on a daily basis.)
There are a huge amount of things that contribute to the cost of building in SF. But allowing tenants to move back, and requiring the building to be up to current safety, fire, and earthquake codes should not be in question — otherwise, we are just encouraging anyone with an older building to burn it down just so they can start over.
You just said what takes hours and hours of meetings to say at City Hall. Thanks!
Did they ever determine the cause of the fire?
The hardware store had a fire in their storage area