'Horror show’ hotel transformed into home for veterans

The former Stanford Hotel on Kearny Street is being renovated to house 130 homeless veterans, with supportive amenities. The former Stanford Hotel on Kearny Street is being renovated to house 130 homeless veterans, with supportive amenities. Photo: Leah Millis, Staff / The Chronicle Photo: Leah Millis, Staff / The Chronicle Image 1 of / 19 Caption Close 'Horror show’ hotel transformed into home for veterans 1 / 19 Back to Gallery

Four years ago it was described as San Francisco’s worst SRO and a “horror show.” Now, after almost $10 million in renovations, the former Stanford Hotel on Kearny Street is about to give 130 veterans something many have lacked for years: a home.

San Francisco is preparing to lease the former single-room-occupancy hotel for about $2 million a year for at least 10 years to provide housing for the city’s most desperate homeless veterans. About 73 percent of the costs are to be covered by the U.S. Department of Housing and Urban Development and the U.S. Department of Veterans Affairs.

The project, known as 250 Kearny, represents a sizable piece of the city’s effort to end homelessness for veterans by the end of 2015, a challenge that President Obama issued to the nation’s mayors in June.

“This project will place San Francisco within reach of meeting that ambitious goal,” said Mayor Ed Lee. “This is the largest number of homeless veterans housed at a single time ever in San Francisco.”

There were 716 veterans out of 6,436 homeless people living on the streets, in shelters, jails and hospitals during the last San Francisco count in 2013.

Since then, two projects targeting homeless veterans have come online with a combined 76 units of housing, although a large chunk of those are designed for six months of stabilization before the tenants move on.

Clarence Cook, a 57-year-old former Army private who drove a mess truck while stationed in South Korea, has about four more months to go at one of the projects, Safe Haven in the renovated Fairfax Hotel on Eddy Street in the Tenderloin.

Cook said he ended up on the streets after getting addicted to heroin and cocaine and being in and out of prison for 30 years. He wants to be one of the 130 homeless veterans selected for 250 Kearny when it opens, probably in November.

Cleaned up

“That would be wonderful,” said Cook, who said he has stopped using cocaine and is taking methadone as part of his treatment for heroin addiction. “I’ve slept on the street before. I had places to go, but still slept on the street chasing dope. … Being a soldier, willing to die for my country, I deserve a better lifestyle than that.”

Veterans who score the highest on a 50-question vulnerability index, which includes the length of time they have spent on the streets, drug use, psychiatric condition and frequency of emergency room visits, will be selected for 250 Kearny. Those who get the housing will be responsible for paying 30 percent of their adjusted income in rent.

The federal government has issued more than 59,000 vouchers nationwide since 2008 for homeless veterans to use to rent a place to live, according to HUD. But on their own, such vouchers have limited effectiveness in San Francisco’s scorching rental market, where studios on lower Nob Hill are listed for $1,995 a month. For example, the 75 vouchers for a combined $885,294 that HUD announced in June were going to San Francisco would each be worth $984 a month.

“The competition is pretty high,” said Bevan Dufty, Lee’s point person on homelessness. “Young workers are coming in with a 700 credit score, and a veteran exiting homelessness is not going to stack up favorably.”

Making it happen

For 250 Kearny, the city persuaded the owners, Sam Patel and Sam Devdhara, to lease the property for use as supportive veterans housing, then pooled city and federal money, including almost $1.7 million annually in HUD voucher funds, to make it work.

“When you design solutions, you have to take your rental market into account,” said Ophelia Basgal, HUD’s regional administrator. “This really makes sense. ... Just lock down a particular property.”

The result is a lease agreement with the city, currently before the Board of Supervisors for approval, that would pay the owners about $1.9 million in rent the first year, or $1,190 per unit per month, with the city responsible for maintenance costs of up to $205,000 a year. Rent payments would increase 2 percent a year over the 10-year term of the deal, which also gives the city a five-year extension option.

Veterans Affairs has committed $500,000 for supportive services beyond regular caseworkers, including counseling, recovery groups and 24-hour staffing at the building. The short-term home rental service Airbnb, which is facing legislation to regulate and limit its use in San Francisco, is chipping in an unspecified amount of money for furniture and providing volunteers to get the building ready for residents.

On a recent visit, construction workers were putting the finishing touches on the restored wooden banister running up six stories. One elevator had been completely replaced. Plaster had been removed from some walls to reveal warm bricks, and other walls had been painted a jaunty green or yellow.

In addition to updated rooms, each with its own bathroom and ethernet, phone and cable TV jacks, 250 Kearny will have social workers and counselors on-site. Five units had specially designed bathrooms for handicapped veterans, and another five had special features for blind or deaf tenants.

It was a far cry from the desperate building on the edge of the Financial District that shocked city officials when they inspected it in 2010.

At that point, about 20 tenants were living in what was otherwise a vacant building. Pigeons had taken over some of the 145 rooms and covered them in excrement. Corroded sinks and toilets were overloaded with debris. There were large holes in some walls. A door marked “emergency exit” had plywood nailed over it. Syringes and cans of Steel Reserve malt liquor were strewn about in one room, apparently by squatters.

“It was hands down the worst inspection I have every been on,” said Deputy City Attorney Jill Cannon, a member of the city’s inspection task force since 2006. “It was a bit of a horror show.”

Upon leaving the building, Cannon said she immediately went to buy a new outfit so the clothes she had been wearing could be cleaned.

At that point, the city had already sued the then-owner, Gitlow Investments, for failing to make required seismic safety upgrades to the masonry building. Gitlow agreed in June 2009 to pay $127,000 to settle that case, court documents show. The company agreed in December 2010 to pay the city an additional $437,500 in penalties to settle a second lawsuit over violations discovered during the inspection, court documents show.

Management change

Patel, whose family now owns eight buildings in San Francisco — most of them residential hotels leased to the city — said he agreed in 2010 to manage the Stanford Hotel under his company, CSV Hospitality Management.

He bought the property last year with Devdhara. The 20 remaining tenants were offered spots in other Patel buildings until 250 Kearny was renovated. Some took cash payments and others moved on, but six will be returning to the building, with their rent remaining the same as it was in 2010, Patel said.

“It’s a very visible example to the private rental market that we’re making progress” housing homeless veterans, Dufty said. “We need private landlords to be more involved.”

John Coté is a San Francisco Chronicle staff writer. E-mail: jcote@sfchronicle.com

Twitter: @johnwcote