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Senior care facility owners sued over failure to provide affordable units

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The city attorney’s office has filed a lawsuit against the owners of The Avenue Assisted Living, alleging they have failed to live up to an agreement to provide low-income housing to seniors. (Kevin N. Hume/S.F. Examiner)

The owners of a senior care facility who are being sued by The City for failing to provide housing to low-income seniors made a failed attempt to legalize the conversion of several affordable units into luxury apartments at the San Francisco Planning Commission Thursday.

According to a lawsuit filed by the San Francisco City Attorney’s Office on March 23, Melvin Lee and Teresa Wong, the owners of The Avenue Assisted Living at 1035 Van Ness Ave., signed an agreement in 2006 to provide a total of 25 units to low income seniors. The agreement was reached with the Western Addition Redevelopment Agency, which was dissolved in 2012, but is now overseen by the Mayors Office of Housing and Community Development.

However the lawsuit alleges that Lee and Wong have “failed to ever house any low-income seniors” in the former Redevelopment Agency property following its purchase for some $2 million in 2000.

The City Attorney’s Office also alleges at least nine of the low-income units were removed or consolidated to form two luxury units, one of which is currently occupied by a “non-senior” and another of which is undergoing construction and intended as housing for Wong.

The construction work, which included the removal of walls between units and the addition of new walls and doors “potentially compromising fire sprinkler coverage,” was conducted without proper permits, according to the lawsuit.

On Thursday, the Planning Commission unanimously denied Lee and Wong’s application for retroactive approval of the construction.

Planning Department staff had recommended denial and found that 17 affordable units in total were removed without permits.

Lee and Wong argued that they had removed the units for “positive, specific purposes” — four units were removed to create larger common areas on two separate floors, and eight were merged to create four larger residential care units.

“We admit we made a mistake on the notice of violation. What we have done is to combine small units into a one bedroom. It was a major need. We merely opened one door between two rooms to make it larger for couples to stay there,” said Lee, addressing planning commissioners Thursday. “The other area, we made modifications in the common area to better serve residents [with] amenities.

Lee acknowledged that nine additional units were merged to create two luxury apartments to house on-site managers, which he argued was required by California Law.

“We have no choice but to combine units to let administrators stay there 24-7,” said Lee. This statement was contradicted by city planning staff, who said state law requires a manager to be present but does not require them to live on site.

Lee and Wong said that they faced challenges in “filling residential care unit vacancies since the building’s completion in 2004,” according to planning documents.

But senior advocates said that senior residential care units were “dwindling” throughout San Francisco, and that the need for them has long outpaced the supply.

“We are in a city that prides itself on aging in place and we can’t afford to have any more seniors in need be without a home or forced out of their homes,” said Tony Robles of the Senior Disability Action Network. “The fact that we are entertaining this [application] is very alarming, to be frank.”

The planning commissioners agreed, calling the project a “case of non-compliance.”

“There were violations and inaccuracies,” said Commissioner Kathrin Moore. “The fact that the Redevelopment Agency disappeared is no reason for that …to occur. The agreements were not properly followed before or after the transfer to The City.”

Lee and Wong were selected to develop the property in a competitive bidding process that included the stipulation that 20 to 30 of the residential care units be set aside specifically for low-income seniors for a period of 50 years. The deal they signed specified that 11 units would be reserved for households making 60 percent of the area median income (AMI) or less and 14 for households at 80 percent AMI or less.

The project, completed in 2004, was originally approved to include a total of 122 residential care units, but only 112 were developed. Since 2005, Lee and Wong have rented out individual units to seniors but kept the those designated as affordable vacant, according to city officials.

Lee and Wong failed to submit annual reports related to the low-income apartments to the City, prompting an unscheduled visit by the MOHCD in 2016 that revealed that substantial renovations had made been to portions of the property, including “combining or removing units to make room for a new library or gym,” according to the lawsuit.


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