By J.D. MorrisDec 26, 2023
The online reviews of the Best Western Red Coach Inn, located on the edge of San Francisco’s beleaguered Tenderloin district, are unsparing.
“If your room is near the alley you get to listen to screaming all night and smell the outside toilet,” one reviewer wrote on TripAdvisor in November.
“I don’t know how the hotel does it,” another said in June. “The neighborhood is SO bad! Feces in the street (I stepped in some), homeless people everywhere, trash, smelly, loud; you name it.”
Both customers indicated they had positive experiences with the staff, but their critical comments about the hotel’s location echoed many of the property’s other online reviews. And those opinions appear to be making it hard for the hotel to stay afloat. Sam Patel, who co-owns the 45-room Best Western at Eddy and Polk streets, said his revenue is down about 12% year over year and the rooms, which typically rent for at least $100 or more per night, are only about half full each month.
“It’s not like the olden days, where people just saw the name and they would come in,” Patel said while standing in front of the hotel on a recent rainy afternoon. “Nowadays, everybody reads the reviews before they tend to book anything. And a lot of them are like, ‘Well, why do we want to book here?’ ”
Patel bought the hotel through a limited-liability company in 2016, and he said he and his co-owners have since spent about $6 million renovating the property. They installed a new heating and cooling system, put in more modern furniture in the guest rooms, upgraded the bathrooms and redid the plumbing.
But given the hotel’s sluggish business, and the persistent complaints about homelessness, public drug scenes and filth on the streets nearby, Patel is now reconsidering his options. He’s even floated an ambitious idea: What if San Francisco bought his hotel and turned it into housing for formerly homeless people? He said he’d also be willing to enter into a long-term lease with the city, which could contract with a nonprofit to operate the hotel as homeless housing.
“There’s a need for it. We’d be more than happy to,” Patel said. He also owns some single-room occupancy hotels that house formerly homeless people in the Tenderloin and elsewhere. One of his properties is 250 Kearny St., a Financial District residential hotel that the city leases to provide housing for formerly homeless veterans.
The hotel recently faced some blowback after it installed sprinklers on the side of its building that faces Willow Street, an alley where homeless people commonly set up encampments. While the manager said the sprinklers were intended to clean the sidewalk of human waste and any unhoused people camping below them were warned to move before they were turned on, the hotel nonetheless agreed to take the sprinklers down after a visit by city building inspectors.
The hotel has tried other ways of responding to its customers’ concerns about the streets around the property. Staff reassure guests that their belongings will be safe at the hotel and remind them that the property has a secure lot where they can park their cars. Customers who want to venture around San Francisco by foot are encouraged to walk south down Polk Street toward Market Street rather than venturing east into the Tenderloin.
Still, the negative comments from customers keep coming, causing Patel to reevaluate the hotel’s future.
But his idea to convert the hotel into housing for people who currently live on the streets might be dead on arrival at City Hall.
Emily Cohen, a spokesperson for the Department of Homelessness and Supportive Housing, said in an email that San Francisco “does not have more housing acquisition funds for adult housing at this time.” Funds available to purchase such buildings using revenue from Proposition C, a business tax that funds homeless services, have already been accounted for, and the city doesn’t expect the state government to do another round of its Homekey program for the foreseeable future. The program provided additional funds to buy properties for homeless housing.
Another limiting factor is the $800 million two-year deficit that Mayor London Breed and city supervisors will need to close when they adopt the next city budget in 2024.
“We are facing a significant budget challenge in the coming year, so I don’t think we will have the resources to explore expansion outside of what is already in the works,” Cohen said. She also said that when the city does expand its supportive housing stock, it is “trying to identify properties outside of the Tenderloin to help diversify the locations of our housing portfolio.”
While Patel acknowledged that the current economic climate is making it hard for him to operate the hotel, he said he’s determined to find a way to keep the doors open even if his homeless housing idea doesn’t work out.
“We’re going to do whatever is necessary to keep the business going,” he said.
Christin Evans, a Haight-Ashbury business owner and homeless advocate who sits on the oversight commission for Cohen’s department, said Cohen is right about the lack of funds currently available for more acquisitions. But she said that could change in the future if Breed were to support steering funds away from other areas of the city budget to fund more homeless housing sites.
Evans couldn’t comment on the feasibility of the city buying Patel’s hotel. In general, she said tourist hotels often need renovations to be suitable for supportive housing. Yet, the financial distress being reported by some San Francisco hotels — the owner of two big ones near Union Square gave the keys back to their lender this year — also presents an opportunity for San Francisco, she said.
“I think that we should be acquiring five to 10 buildings a year, especially at this point in time when there’s so many great potential buildings that are available because of this unusual economic circumstance,” Evans said.
At the Best Western, Patel looks back on his 2016 decision to buy the hotel with pangs of regret. He thought it was a good business opportunity — that maybe the debut of the Van Ness campus of California Pacific Medical Center, which opened nearby in 2019, would help attract customers. He was also familiar with the area, having lived in the city since 1976 and already owning other properties in the area.
Now, however, Patel sees little reason to hope that the reasons for his customers’ online complaints — open-air drug use, tent camps and human waste on the streets near the hotel — will improve anytime soon.
“It’s just becoming terrible,” he said. “If we would have known that it was going to be this bad, we never would have purchased the property.”
Reach J.D. Morris: jd.morris@sfchronicle.com; Twitter: @thejdmorris
Dec 26, 2023 (SFChronicle.com)
By J.D. Morris
J.D. Morris covers San Francisco City Hall, focused on Mayor London Breed. He joined the Chronicle in 2018 to cover energy and spent three years writing mostly about PG&E and California wildfires.
Before coming to The Chronicle, he reported on local government for the Santa Rosa Press Democrat, where he was among the journalists awarded a Pulitzer Prize for their coverage of the 2017 North Bay wildfires.
He was previously the casino industry reporter for the Las Vegas Sun. Raised in Monterey County and Bakersfield, he has a bachelor’s degree in rhetoric from UC Berkeley.
He can be reached at jd.morris@sfchronicle.com.
