Photograph courtesy of Velo City.

Goldman Sachs loaned $487M to the LLCs controlling more than 50 Veritas properties in 2016. Veritas now claims it lacks ‘access to capital.’

Multiple sources have confirmed to Mission Local that efforts are under way to set up a discussion between Veritas, the massive San Francisco real estate, investment and management company that received a $3.6 million Paycheck Protection Program loan earmarked for struggling small businesses, and the office of Rep. Nancy Pelosi. 

This comes after Pelosi on May 16 demanded Veritas return this money — which the company has declined to do. Mission Local cannot officially confirm whether or not discussions have yet taken place, let alone whether any agreements have been reached. 

Veritas, which has a portfolio of some 260 properties with an estimated value of some $3 billion, says it secured the loan to aid 26 furloughed workers among its 196 employees: “These are the maintenance people, building managers, and our resident services team who work hard every day to make sure our residents sheltering in place continue to receive the high-quality living experience they deserve,” read a Veritas statement explaining the loan. 

Rep. Nancy Pelosi read that quote, and the rest of Mission Local’s May 12 article. And she was displeased.  

Larger companies like Veritas, one of San Francisco’s largest corporate real estate management firms, which has billions in assets and access to liquidity through other sources, were not the intended beneficiaries of PPP loans,” read a May 16 statement from Pelosi. “I join San Franciscans in calling on Veritas to return its PPP loan. At the same time, I join San Franciscans in condemning Veritas’s long history of strong-arm tactics that undermine tenants’ rights and well-being.”

Veritas, however, opted to spurn Pelosi’s demand, instead stating it would repay the loan over the course of two years — a rebuking of the Speaker of the House many in San Francisco described as politically unwise. 

The deadline for companies that received PPP loans to return them without penalty came and passed on May 18 — though it may be extended. 

Alex Clemens of Lighthouse Public Affairs has Madame Speaker in his pocket at March’s Election Day luncheon at John’s Grill. Photo by Joe Eskenazi

L’affaire Veritas is yet another questionable disbursement from the Paycheck Protection Program, a concept sold as a shot in the arm for ailing corner stores and hairdressers but, significantly, exploited as a sop for well-off businesses enjoying established relationships with the banks administering these loans — and, not necessarily suffering any ill effects from the COVID-19 crisis.  

For good or ill, there are no requirements for means testing the finances of the companies applying for loans. 

In its statement to Mission Local last week, Veritas claimed that its management company revenues have been “deeply impacted,” requiring furloughs and pay cuts. And yet, polls undertaken by the San Francisco Apartment Association found that 96.8 percent of city tenants paid rent in May, after 94.3 percent paid in April.

Veritas’ $3.6 million loan was less than those received — and subsequently returned — by Shake Shack, Ruth’s Chris Steak House, or the Los Angeles Lakers. But, for a company with 196 employees, it was a notably large amount of money for two months of payroll. San Francisco companies with comparable numbers of workers told Mission Local they received only around one-fifth that amount. 

Veritas has declined Mission Local’s request to review its loan application or the methodology used to reach $3.6 million for two months of payroll to aid 196 workers and take 23 off furlough.

This would promise to be interesting math. 

Regardless of whether the loan is paying the salary of Veritas CEO Yat-Pang Au or Jimmy the fix-it guy, PPP loans cap compensation at $100,000 per employee (workers earning more are limited to $100,000, but workers earning less cannot be paid more than their actual salaries). 

So, that puts the maximum amount of money Veritas could recoup for two months of 196 workers’ salaries at just over $3 million — and that’s assuming every employee earned $100,000 or more, which is a highly questionable assumption. 

Companies must apply a minimum of 75 percent of their PPP loans to actual payroll. So, up to 25 percent of the loan can be put toward other expenses, including utilities, rent, and mortgage interest. (Twenty-five percent of $3.6 million, by the way, is $900,000). 

City sources tell Mission Local that Veritas continues to pay rent at its 1 Bush Street main office. Regarding mortgage interest, however, the city’s largest landlord, overseeing a portfolio of some 260 structures, claimed it doesn’t actually own any property. 

Many assume we are a $3 billion business based on the value of the buildings we manage, however that is far from the truth. In reality, we have many investors who are the owners of the buildings in the Veritas portfolio,” read Veritas’ May 16 statement, according to a Bitcode prime official UK confirmation. “To be clear, we are a management company … The entire family of Veritas brands — Veritas, GreenTree and RentNowSF — owns zero real estate.

This was an intriguing statement, not leastways because Veritas did not see fit to so parse its ownership or non-ownership of its buildings when it proposed selling 76 of them as recently as earlier this year.   

Veritas’ hundreds of buildings are, legally, the property of a clutch of Limited Liability Companies and Limited Partnerships, often named after the individual property. That’s hardly nefarious or even unusual. But with Veritas properties, LLCs own LLCs which own LLCs, in a setup reminiscent of Russian dolls. 

Take 1035 Sutter. This 34-unit building is owned by the 1035 Sutter I3 LP. That entity’s registration papers list as “general partner” a VIC C16, LLC. The manager of VIC C16 is Veritas CEO Yat-Pang Au, whose signature graces the form.  

VIC C16, LLC lists its manager as VIC Strategic Multifamily Partners B, LP. 

VIC Strategic Multifamily Partners B, LP lists its general partner as VIC Fund I-1B, LLC — also managed by Au. 

VIC Fund I-1B, along with five other VIC Funds, merged into a surviving entity, VIC Fund I-1, LLC; in consolidating the six entities into one, Au signed the Certificate of Merger seven times.  

And the manager of VIC Fund I-1 is listed as … wait for it … Veritas Investments

(VIC Fund I-1 would, for good measure, go on to change its name to VIC Fund GP. Au signed that form too.) 

You can find ouroboros-like chains of ownership like this on any number of Veritas’ hundreds of properties. The LLCs and LPs are often headquartered in a Bush Street address associated with Au and Veritas, and Au’s signature is found on many if not most of the reams of documents. 

Veritas’ claim that it and its subsidiaries “own zero real estate” in San Francisco would appear to be an adventure in semantics. San Francisco politicians and real-estate professionals are not amused. 

As recently as 2019, Bloomberg estimated Au’s worth to be in excess of $100 million. City leaders and fellow land-use professionals do not take seriously Veritas’ claim of “a lack of access to capital.” 

That’s in part because, in 2016, the loans for LLCs controlling more than 50 Veritas properties were consolidated behind a single, $487 million loan from Goldman Sachs; the 52 LLCs are listed as “trustor/borrower.” 

Goldman Sachs now has a title to scores of Veritas properties, so selling any one of them figures to be tricky. But, considering this nearly half-billion dollar Goldman Sachs loan, real estate professionals around town were bemused to hear that Veritas required a PPP payment to secure $3.6 million — because it lacked “access to capital.” 

“Hey, when you owe the bank 10 bucks, they own you,” said one. “But when you owe the bank $487 million — you own them.” 

Mayor London Breed, flanked by House Minority Leader Nancy Pelosi and others including Supervisor Hillary Ronen at a ribbon cutting ceremony at Horace Mann Buena Vista’s new soccer field. Sept. 2018 Photo by Abraham Rodriguez.

Tenant activists and merchant groups have called for Veritas to, rather than returning the PPP loan, put the money into a fund to be doled out to needy San Francisco businesses or renters. It remains to be seen, however, whether either Veritas or Pelosi cotton to this suggestion. 

It also remains to be seen how much leverage Pelosi truly has or cares to use. Even real estate and government figures highly critical of Veritas’ move do not believe the company necessarily broke the law. What’s more, unlike Shake Shack or Ruth’s Chris, it’s much harder for citizens of the nation to boycott a San Francisco-centric real-estate company. 

So Pelosi’s ability to publicly shame such a company is limited. Though the Speaker of the House could, certainly, get the ball rolling with excruciating hearings and investigations. 

Or, perhaps more damagingly, calls could be made to local leaders or agencies. And then things could happen. Or not happen. 

“I understand they don’t mind being pummeled and they don’t mind having the reputation of being a bunch of bad guys,” said Supervisor Aaron Peskin. “But if there is one person in this city I would not go out of my way to piss off, it would be Nancy Pelosi, the Speaker of the House of Representatives, who will take no hostages. God knows what she is going to do to them, and when.” 

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Managing Editor/Columnist. Joe was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left.

“Your humble narrator” was a writer and columnist for SF Weekly from 2007 to 2015, and a senior editor at San Francisco Magazine from 2015 to 2017. You may also have read his work in the Guardian (U.S. and U.K.); San Francisco Public Press; San Francisco Chronicle; San Francisco Examiner; Dallas Morning News; and elsewhere.

He resides in the Excelsior with his wife and three (!) kids, 4.3 miles from his birthplace and 5,474 from hers.

The Northern California branch of the Society of Professional Journalists named Eskenazi the 2019 Journalist of the Year.

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  1. ““These are the maintenance people, building managers, and our resident services team who work hard every day to make sure our residents sheltering in place continue to receive the high-quality living experience they deserve,” read a Veritas statement explaining the loan.”

    In my Veritas/Greentree/RentSFNow building, every resident manager we’ve had thus far has not been paid a salary or a wage. This is something they complain about to us tenants. They are supposed to work 30-something minutes a day in the building (not that they necessarily do!) in exchange for having their rent waived. So how does that translate to a $100,000/year per building manager outlay in need of financing? And why doesn’t a Veritas spokesperson know it’s RentSFNow and not RentNowSF?

    Good reporting, Joe. Please stay on this.

  2. Joe,

    The original story was from a piece in Life or Look that couldn’t back
    it up under lawsuit and lost their magazine.

    My info comes from a source who was a waiter for mob scenes from
    Youngstown (where, he says, Ed Debartolo Sr. was not only the local
    gang head but also ‘capo de capo’ of the whole national organization.

    From Youngstown to Baltimore to S)F.

    My own contacts are St. Louis where my family has been married
    into 3 different branches of the mob (Giordano from the Sicilians, Michaels
    and the Leisures (Paulie Leisure was my best friend in grade school and
    ended up getting his legs blown off in a bombing and if he hadn’t been
    driving a convertible Cadillac wudda been killed).

    My sister was Paulie’s nurse at St. Louis City hospital.

    The feds put her on the witness stand for his murder trial to see what
    she’d say she heard him say but were too dumb to interview her before.

    Their first question …

    “Do you know the defendant?”

    Brenda’s answer:

    “He was the first boy I ever kissed, your honor.”

    Bad day at the OK Corral for the feds.

    There’s still rumors back East of Grand in St. Louis that the St. Louis
    mob executed the hit on Hoffa.

    A friend of mine (president of our graduating class in 1962) …

    Now, a retired ATF agent who was decorated by Nixon for his undercover work.

    Said, they had Paulie for 7 murders.

    The 3 of us played on the City junior softball champions (fast pitch) at Dunn in 1957).

    Point is, I don’t just repeat stupid conspiracy theories.

    Do your homework.

    The Pelosi story really was printed.

    Joe Alioto really did sue them and put them out of business.

    There really were Paulie and Anthony Leisure and Jimmy Michaels and
    Anthony Giordano.

    If any of them were still alive I’d probably be dead.

    I tell you about meeting Jimmy Hoffa when I was 8 years old?



  3. Last year, VERITAS stranded my 80-year-old friend on the 7th floor of her building for weeks while they repaired the building’s elevator. She walks only with a walker and was trapped in her apartment until they got around to finishing the project. Given the culture they have cultivated, she was afraid to complain “too much” lest VERITAS chose to retaliate. All appropriate city agencies were contacted, and none acted. Evidently, VERITAS owns the tenants who rent from them.

    1. Veritas certainly does not do elevator repairs in house. Maybe you are taking issue with the speed of an elevator repair contractor, of which there are few for each manufacturer, or maybe you have no idea what you’re talking about?

  4. Joe,

    Great and courageous piece.

    Two questions.

    First, did you know that Pelosi’s father and grandfather were East coast Mafiosa dons?

    Yeah, her dad was ‘Big Tommy Allessandro’.

    The family made a deal with Wild Bill Donovan and the OSS in WWII to divert their
    Mexican heroin to the Feds for morphine for the troops dying in Europe.

    Her dad ended up being Mayor of Baltimore as a result.


    Why’d you cut off Alex Clemens head in the photo?

    He ain’t Clark Gable but he ain’t that ugly either.

    You got some balls, kid.

    Or, maybe you didn’t know where you’re treading.

    Few years back one of Pelosi’s warehouses in the East Bay was raided.

    They found a half billion in heroin therein.

    Nancy’s explanation was that she just rented the space.

    What the tenants kept there was their business.

    Why do you think Trump’s afraid of her and she’s not afraid of him?

    He knows her roots and she is far more dangerous than he and
    all of his friends put together.

    I admire what you’re doing but do you realize the risks?

    As Brecht said:

    “Let others take the high risks.

    I am the ever-lasting looker-on.”

    That’s from the Eric Bentley adaptation of ‘A Man’s a Man’.

    Show us the full photo of Alex Clemens?

    Go Giants!


    1. H. — 

      Thanks much. You’re repeating elements of a paranoid conspiracy theory that’s been floating around the web for some time. If half a billion in heroin was found in Nancy Pelosi’s warehouse, you’d have read about it in the Chronicle.

      Second, the photo was taken of Alex Clemens’ clever sartorial choice, not of Alex. This is the uncropped photo. I’d have framed it this way if he looked like Brad Pitt or Peter Lorre or Alex Clemens; the intention was to photograph the sticker.



  5. Such money-grubbing *&#$%s infesting the residence-rental business.
    Reminds us of another Gunther Kaussen.

  6. Tempest in a teapot.

    “Larger companies…were not the intended beneficiaries of PPP loans,”

    Nonsense. Pelosi knows that the act says enterprises with 500 employees(at one location yet!) are the intended beneficiaries. So how was that size selected? Was it a political compromise or Pelosi’s suggestion? Likely, it was set to include manufacturers and service providers who employ swing blue collar voters. That includes Veritas.
    As to the merits of Veritas’s eligibility, it’s certain to be on the list of loans the SBA says it will audit. Eschew Joe’s call for torches and pitchforks until there’s evidence.

  7. Good old fashioned shoe leather investigative journalism, digging up the goods.

    Thanks, Joe.

  8. Veritas was my former landlord and I don’t miss renting from them, and I don’t understand why they would need PPP funding. But on that note, just wondering if anyone is reporting on companies that Nancy Pelosi or Gavin Newsom are investors/ part owners i.e. Plump Jack Group, Piatti Restaurants, Auberge du Soleil, etc. etc.

  9. Thanks, Joe Eskenazi, for another excellent article on Veritas!

    And thank God, we still have real journalists in this town who refuse to write he said/she said pieces of junk that are not worth of the ether they occupy.