The San Francisco building that was at the center of a lawsuit during the pandemic, aimed at urging the city to address a major homeless encampment issue, is now up for sale. This six-story mixed-use residential building, situated at 725 Van Ness Ave., has been listed on the market for $6 million, at a rate of $255 per square foot. This price is notably lower than what it might have fetched a few years ago, approximately half the average price-per-square-foot for buildings with more than 10 units, as noted by Brad Lagomarsino, the realtor from Colliers handling the property. Don’t miss out on the latest buzz in Business; it’s all here at Velvet Times.
One of the reasons for this reduced price is the building’s location, perched on the outskirts of San Francisco’s challenging Tenderloin neighborhood. In 2020, Larch Street, an alley connecting Van Ness Avenue and Franklin Street, became a focal point for a significant homeless encampment. The presence of tents and widespread drug use made it extremely challenging to rent out apartments in the building. Denise Hart, the property manager representing her family, who own the building, revealed that a third of the units and the first-floor storefront in the historic 1925 building now sit vacant.
Hart explained, “The neighborhood has changed significantly due to the tents in the alley, rising crime rates, frequent break-ins, and open drug dealing, making it nearly impossible to manage.”
Lagomarsino echoed these sentiments, stating, “Given the ongoing issues on the streets, the building’s marketability has suffered.”
The situation on Larch Street deteriorated to the extent that in June 2020, three trustees of the Giosso Children’s Trust, the owner of 725 Van Ness, and the owner of a neighboring building filed a lawsuit in hopes of compelling the city to take action. Their legal complaint highlighted the presence of open-air drug sales, criminal activity, large groups of drug users, and tents obstructing sidewalks, all of which posed a significant threat to Tenderloin residents.
They alleged that the city was effectively using the Tenderloin as an unofficial containment zone for homelessness and drugs, a policy that violated their rights. Ultimately, they dropped their lawsuit after the city cleaned up the alley for a brief period.
However, problems persisted on Larch Street, including homeless residents lighting fires, engaging in vandalism, and using drugs. In July, building residents placed planters on the sidewalks of Larch Street to discourage homeless people from camping there, resulting in many of the tents relocating to Van Ness.
Residents of 725 Van Ness voiced that they’ve borne the brunt of the area’s issues. Salvador Trejo, a resident since 1996, mentioned facing a series of break-ins in 2020. Trejo also reported harassment and threats from individuals camping on Larch Street, though his calls to the San Francisco Police Department went unanswered. He had to contact the San Francisco Fire Department multiple times due to fires outside the building, including on the day of this interview. The smoke produced a noxious chemical smell that lingered for hours.
Trejo expressed his fear, saying, “I survived the Oakland Hills fire in 1991. I still feel traumatized from that experience. Now, with this, it’s not only the smell; it’s also the fear I may wake up one morning, and the building is going to be on fire.”
He urged the city to relocate the encampment, particularly a large tarp directly in front of the building. However, under a 2022 court injunction, San Francisco city officials are temporarily prevented from enforcing laws against sitting, lying down, or sleeping on public property, except in specific cases.
Given the challenges faced by the Tenderloin, converting the building into supportive or homeless housing might appear to be a logical solution. However, when Lagomarsino reached out to nonprofit organizations about purchasing the building, none of them showed interest.
Lagomarsino summarized the situation, noting, “The challenge is that the buyer must have long-term faith that San Francisco will recover.”
Denise Hart, representing her family’s property, expressed deep sympathy for the tenants, many of whom have known her parents and even her grandparents throughout the building’s 65 years of ownership. She stated, “It’s heartbreaking for our family to have to let the building go, but we can’t keep up with it anymore.”
