Remember when we talked about how 1100 Sacramento Street was set to become the city's most expensive TIC ever, and possibly its biggest? And remember how at the time there were apparently 10 units still occupied by hold-out tenants in the 33-unit apartment building as of last September? Well, it turns out that those tenants are at the center of a legal battle over the new Ellis Act legislation that David Campos got passed back in April.
Under new rules that took effect June 1, San Francisco tenants who are being evicted under the almost-30-year-old Ellis Act must be paid relocation allowances equivalent to the difference between their current rent and what it would cost to rent a similar, market-rate apartment for two years. For longtime tenants in that building atop Nob Hill, one doesn't need to be a math whiz to know that could mean some huge sums for the developer who bought the building.
The TIC units are being sold under the name Park Lane, and as we reported two weeks ago those units are among the most expensive currently on the market, averaging $1,500/square foot. Only 12 units have so far been sold, with three more promised to hit the market this fall, and they look pretty darn swanky.
But let's say for argument's sake that someone was living in one of the two-bedroom units for decades and was paying something around $800/month in rent. To get an equivalent two-bedroom with a view on Nob Hill they could be spending $5,000/month or more in this market. So, $4200 x 24 months = $100,800. Multiply that by 10 tenants, and you can see why the developer might be trying to get out of it.
As CBS 5 reports, U.S. District Judge Charles Breyer is fast-tracking the aforementioned case brought by the San Francisco Apartment Association and some individual landlords, including Park Lane Associates. On Friday, Judge Breyer refused to issue an order that would immediately block the law, but he said he would make sure the case was heard by October 6 in order to be decided in time for an October 24 deadline for the remaining tenants to be evicted and paid out at 1100 Sacramento. Park Lane Associates estimates that they would owe the tenants $1.5 million (or roughly what they're getting for the sale of a single unit in that palace). In total, the developer was estimated to be grossing $100 million at sellout as of a year ago, and that number has definitely gone up.
Representing the tenants, attorney Joseph Alioto told the court that many of the tenants who already left did so via wrongful evictions, and "no one left voluntarily." No tenant has yet received a relocation payment.
Previously: Landlord Advocates Sue City Over Ellis Act Legislation
Condo Prices Might Actually Be Starting To Come Down
Behold, S.F.'s Most Expensive TIC Ever ... At $100 Million