- Property: The West Hotel
- Location: San Francisco
- Cost of Renovation: $15 million
- Scope of Project: Structural repairs, plumbing and HVAC updates, seismic upgrades and more
The West Hotel, a 105-unit single-room occupancy property in San Francisco's Tenderloin District, may be one of the best examples of a successful renovation that almost wasn't.
In fact, what the Tenderloin Neighborhood Development Corp., a nonprofit provider of affordable housing for low-income residents of San Francisco's Tenderloin and central city neighborhoods, really wanted was another Tenderloin property, the Ambassador Hotel. But the owner of the two hotels requested a package deal. "The owner wanted to relieve himself of these two neglected buildings and sold us the Ambassador in 1999 on the condition that we also take the West Hotel," explains Judy Wong, a fund development associate for TNDC.
It seemed like a good deal for the group, especially given San Francisco's significant homeless population. (Almost half of the West Hotel's current residents were homeless prior to moving into the property.) Plus, the Tenderloin, which is sandwiched between Union Square and the government complex and often heralded as one of the city's worst neighborhoods, was undergoing the beginnings of revitalization, with several other buildings slated for renovation.
But getting the project off the ground was a bigger challenge than TNDC and its construction partner, Cahill Contractors, envisioned.
Any rehab is challenging, chiefly because things are never what they seem. At first glance, the West Hotel building looked unkempt, but not unmanageable. However, since it was full of residents, there was a limit to the amount of exploratory demolition contractors could do.
But after a laborious walk-through, Chuck Palley, Cahill's president and the project's construction manager, knew there was plenty to be concerned about. "The wood framing was in bad shape, the floors were seriously sloped, and the walls were out of alignment by two to three inches," he recalls. "It was a different, fun-house experience."
Those findings were only the beginning. Additional problems included a steel and cast iron beam that extended beyond the joists it was to support, creating a structural conflict; common shower stacks with dry rot extending several floors from decades of unfixed leaks; and a previously concealed heating oil tank that was missed by the environmental survey.
As a result of the off-kilter walls, floors, and framing, the West Hotel had to be almost completely reframed. Floor joists were replaced, and services such as water and HVAC were upgraded. But the most extreme project was leveling the building. "We had to jack up the building six inches to level it," Palley notes. "It took a pretty monstrous shoring system in the basement to do it."
He laughs at the memory. "Honestly, it probably should have been torn down, because we spent almost as much renovating it as if we'd built it new. But there's a reluctance from the city to start building new when you've got a façade with character."
Tight Budgets, Tight Timing
With more than cosmetic improvements required, TNDC relocated residents to other buildings while the renovations were happening. The extra work also added about $850,000 to the budget. "We had a big contingency, but not that big," Palley quips. Original funding to acquire and renovate the property, relocate residents, and cover other associated expenses came from many sources, including $8 million in low-income housing tax credits, $3.8 million in federal HOME funds, and a $1.1 million Community Development Block Grant loan, among other sources. Additional funding came from a substantial contingency fund, which was depleted, and some "soft cost savings" that made up for the overall shortfall. The final cost of the rehab was about $15 million.
The additional construction also added several weeks to the schedule, turning the work into a 15-week project and pushing the property dangerously close to an important deadline. The Tenderloin Neighborhood Development Corp. needed to lease up the building fast to hit a Dec. 31, 2004, deadline for meeting the 100 percent occupancy level required by federal low-income housing tax credit financing rules. Luckily, the group met the deadline, thanks to the collaborative efforts of the architect, engineers, and contractor, according to Nick Griffin, TNDC's senior project manager.
In contrast, getting city approval for the West Hotel wasn't too tough, thanks to a city-wide initiative that replaces cash aid to homeless people in the social services system with housing and other support services. The only real hiccup in the permitting process occurred when the building department lost the project's permit set–twice.
Despite all the obstacles, the project is now a bona fide success, providing permanently affordable homes for homeless individuals, people with HIV/AIDS and disabilities, seniors, and other low-income citizens. "San Francisco has long had a housing crunch that has made it difficult to provide affordable housing, especially for the most disadvantaged," notes Martin Greenman, a land-use attorney with San Francisco law firm Meyers Nave. "Projects like the West Hotel are important because they demonstrate that dilapidated buildings can be upgraded to provide humane housing."
–Margot Carmichael Lester is a freelance writer in Carrboro, N.C.