S.F. sues major residential rental firm

One of The City’s largest residential rental companies has been slapped with a lawsuit alleging it intimidates renters, illegally refurbishes apartments and cheats The City out of fees.

San Francisco City Attorney Dennis Herrera filed suit Wednesday against Skyline Realty and its subsidiary company, CitiApartments, along with eight limited liability companies and several individuals, for threatening renters, illegally evicting them, renovating apartments without proper permits and failing to pay fees for flipping residential apartments into high-end corporate suites.

“What happened here was essentially that Skyline paid too much for its buildings and the only way it could recoup its investment was to intimidate tenants and get them out, then raise the rents and convert buildings to units of a different character, many times corporate executive suites, which enabled them to raise the rent, sometimes in the course of a year,” Herrera said Wednesday.

The Gaylord Suites, formerly the Gaylord Hotel, “reaped a substantial windfall” for the defendants, according to Hererra’s office. The 77-year-old building’s units, The City alleges, were all converted from residential rooms to short-term corporate executive apartments, in violation of the Hotel Conversion Ordinance. The monthly rent for a room at the Gaylord went from an average of $990 in 2004 to $3,972 once renovation was completed in 2005.

The lawsuit comes on the heels of an April lawsuit filed by 23 tenants, claiming Skyline, CitiApartments and eight other subsidiaries used tactics such as questioning tenants’ immigration status and sending armed men to the apartments of rent-controlled tenants. Many of the alleged victims are old, disabled or speak limited English.

The City’s action takes a broader scope and calls for higher penalties than the lawsuit filed by tenants. It alleges that Skyline and its subsidiaries conducted construction without permits and as a means by which to harass tenants, shutting off utilities and generally making buildings unpleasant. The lawsuit accuses the defendants of skirting city building codes and illegally removing residential units from the market.

Under the San Francisco Hotel Conversion Ordinance, a property owner cannot remove residential units from the rental market without paying a mitigation fee to The City. The lawsuit alleges that the defendants did not pay those fees.

“I think that what you’ll find is that the conduct that was engaged in by Skyline is so pervasive and so widespread that the litigation filed today was the only way in which we would be able to stop that conduct,” Herrera said.

Calls to John Seigel and Edward Singer, attorneys for the defendants, went unreturned Wednesday, as did multiple calls to managing partner David Raynal.

Seigel has said previously that the company engages in no illegal activity. It does, he said, offer to buy out tenants living in rent-controlled apartments, which is legal. But he said the company does not engage in intimidation.

In a June interview, Raynal told The Examiner that his companies conduct a lot of construction work on its buildings, which are often old. He said Skyline and its subsidiaries had spent more than $50 million on construction work in the last five years.

The City is seeking an immediate injunction against “further lawlessness by the defendants.” It also seeks disgorgement of profits and restitution, as well as civil penalties that could include $1,000 per day per housing code violation, starting from the first day the violation is found to have begun. It also seeks an additional $2,500 per day per violation for each “unfair and unlawful business act,” as well as another $2,500 for each unfair and unlawful business act perpetrated against a senior citizen or disabled person. The City also seeks attorney's fees and costs.

amartin@examiner.com

Bay Area NewsLocal

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Former Stockton Mayor Michael Tubbs spoke to San Francisco’s new Guaranteed Income Advisory Group on April 16. (Courtesy SFGOV)
City launches task force to explore Universal Basic Income programs

San Francisco on Friday launched a guaranteed income task force that could… Continue reading

Muni’s K-Ingleside line will return six months earlier than previously announced. <ins>(Kevin N. Hume/S.F. Examiner)</ins>
K-Ingleside train to return on May 15

Announcement comes on the heels of pressure from Supervisor Myrna Melgar

Demonstrators march from Mission High School towards the San Francisco Police station on Valencia Street. (Jordi Molina/ Special to the S.F. Examiner)
Vigil, march honors those killed by police

Deaths of Daunte Wright, Roger Allen and others prompt renewed calls for defunding

A Recology employee stands at the comapany’s recycling facility on Pier 96 in 2016. (Jessica Christian/2016 S.F. Examiner)
Nuru scandal: Feds charge second former Recology executive with bribery

A second former Recology executive is facing charges for allegedly bribing ex-Public… Continue reading

Skier Andy Padlo crosses a frozen Spicer Reservoir. (Courtesy photo)
Stormy weather tests skiers’ mettle on Dardanelle traverse

Overcoming challenges makes outings more rewarding

Most Read