City may use eminent domain to claim historic hotel for development project

A push to replace a vacant building with furniture famously bolted to its walls on Sixth and Howard streets with housing and stores will be discussed today by The City’s redevelopment agency, which is considering legal efforts to forcibly purchase the property.

The 144-room, 99-year-old Hugo Hotel has been empty since it was gutted 20 years ago by fire, according to a city staff report for today’s meeting. In April, the redevelopment agency offered to buy the property for $3.25 million, but it was turned down by the Oregon-based owners, who sought $7 million, according to the report.

Redevelopment agency Executive Director Fred Blackwell said the hotel blights a key corner of the Sixth Street corridor and should be turned into affordablehousing units with stores at street level.

“The best approach in a case like this, is to have the owner take up their responsibility for properly maintaining their property,” Blackwell said.

But with negotiations between the agency and property owners stalled, Blackwell said he supported eminent domain proceedings. “This is not a tool that we’re using willy-nilly,” he said.

The hotel owner’s real estate appraiser told The Examiner he expects his client and The City to disagree over the value of the building, but not over the value of the land.

“It’s been seismically reinforced and it’s got a roof up there that’s not that old,” appraiser Patrick O’Malley said. “The building is watertight and … those walls are about a foot and a half thick.”

Redevelopment staff has not been inside the Hugo Hotel, according to agency project manager Mike Grisso.

The redevelopment agency has worked with nonprofit Urban Solutions to overhaul the downtown Sixth Street corridor since January 2003, when it had a “super-high concentration of liquor stores and adult uses,” Urban Solutions project manager Tracy Everwine said at a recent Yerba Buena Alliance neighborhood meeting.

“The only interested prospective tenants at that time were people who wanted to sell tobacco, liquor or cheap grocery items,” she said.

Since 2003, 28 new businesses — including restaurants and a laundromat — have been wooed to the corridor, according to Everwine.

jupton@examiner.com

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