Posts Tagged ‘Lembi’

Now the Lembi hotels are in trouble

admin April 10th, 2010 No Comments

Andrew Ross in the SF Chronicle has been staying on top of the continuing dismantling of the Lembi real estate empire. Earlier this month, he noted that the Lembi group was about to be sanctioned $30,000 by the court for not providing their part of discovery in a law suit brought by former tenants who could not get their security deposits back. In February, the court fined the Lembis $50,000 for not meeting discovery requests for the suit brought by the San Francisco City Attorney’s office in 2006.

The other bad news for the Lembis was that Yvonne Lembi Detert, the daughter of Frank L who runs the family hotel business, was having a hard time making payroll. Her highly leveraged hotels haven’t been doing very well during the downturn. The company recently placed the hotels in Chapter 11 bankruptcy protection. Lembi-Detert was able to make payroll in the beginning of the month but it was unclear if mid-month paychecks would be forthcoming. Sick days and vacation days were not being paid either.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/01/BU9D1CNTS5.DTL

Latest on Lembi Collapse

admin January 22nd, 2010 No Comments

From SF Business Times:

Klingbeil Capital latest to feast on Lembi holdings
Klingbeil Capital Management has joined the growing cadre of private real estate investment firms taking advantage of the dramatic implosion of the Lembi family’s apartment empire. The Washington D.C.-based owner paid $10 million for three San Francisco buildings previously owned by the Lembi Group, which has lost thousands of units to foreclosure over the past 18 months.
Klingbeil Capital Management purchased the 41-unit 646 Corbett St. in Twin Peaks for $6 million, and the 35-unit 620 Eddy St. in the Tenderloin for $2.6 million. The third building, the 19-unit 1082 Post St., was not disclosed, although it had been marketed just under $2 million.
The buildings at 646 Corbett St. and 620 Eddy St. were still owned by the Lembis, but sold in cooperation with the lender, Resource RE. The building at 1082 Post St. was among the 50-plus buildings the Lembis gave back to the Swiss Bank UBS in lieu of foreclosure.
Stephen Pugh and Mark Bonn of Alain Pinel Investment Group represented the sellers.

IRE, Here It Comes

admin December 29th, 2009 No Comments

Today I sent off the SF magazine story to the Investigative Reporters and Editors contest. This was a large effort. Answering the 12 questions took several hours and yielded five single-spaced pages.

Then I took the article down to the local copy store where the whole staff helped me copy the article, all 15 pages of it. We had to cut the spine off the magazine to get the pages to lay flat on the copier. The IRE requires that the pages be 11 X 17 inches, so huge copies in thick stacks.

Then I had to burn a CD that contained a PDF of the article and the other elements of the application.

That’s $115 to enter the contest, $106 to copy the article three times meet the other clerical requirements, and $18.77 to send it three-day delivery via FedEx. Total $239.77.

These are the cheerful people who helped  me assemble the application.

These are the cheerful people who helped me assemble the application.

I’m feeling lucky today. I hope I’m right!

Good-bye To The Story, Hello To The City

admin December 26th, 2009 No Comments

Right about now, all over San Francisco, my magazine piece about the Lembi family is being taken off the shelves and the next issue of San Francisco Magazine is filling that slot. As a writer, it’s always sad when that happens, when the reading public moves on. After working on the story for a year and a half, it is interesting how briefly it is in the public eye and on the minds of the few who read it.

I’ve been attacked for writing a “hit piece” against the Lembi family, as if I set out to slander them. Certainly this was never the case. I got this assignment a year and a half ago when the editors of the magazine wanted me to explore how hard it was to be a landlord in San Francisco, and the Lembis were only a piece of a much larger focus on the world of landlords.

The first family we focused on was a couple called the Macys, who had bought a building on Clementina and, according to the SF Chronicle, used a number of aggressive tactics to get their renters to leave, including pondering how to cut out the support beams under the floor of one tenant’s apartment so that it would fall with him in it. When the world economy began to collapse, and the Lembis with it, my story shifted to cover the financing behind their unprecedented expansion.

I noticed how they repeatedly closed escrow on a dozen or more buildings on the same day and worked to find out why this was so. This was the thread of investigation that led me to the complicated world of their international financing and, because of that, forced me to look more closely at the incidents alleged by the suit that the SF City Attorney’s office filed against them.

The work of unpacking this opaque world was a strain at times, but it also gave me a chance to do the things I enjoy. I spent hours pouring over financial documents, court records and title transfers in courts and public buildings. I also was allowed into the homes of many regular citizens with stories to tell.

I am grateful to the editors of San Francisco magazine for allowing me to write this story at a length that allowed me to tell it fully, something that is very rare these days in journalism. They stuck with me and this story until I had it nailed down tight with public records to back everything I said. While I got frustrated when they kept asking for more and fact checking me to the point of exhaustion, I am not sorry they did.

More importantly for me, the story gave me a chance to walk the streets of the city I love and see it, feel it, in a way that I haven’t been able to do since I was in my twenties. For all my moaning about the vanishing city of my youth, the story allowed me to see that much of what I love about this town still exists, but in the hands of people I’ve yet to meet. In all ways, a good experience for me, and one I want to perpetuate

Same Business Plan, Different City

admin December 21st, 2009 No Comments

A British company, The New York Times reports, had the same idea as the Lembi’s did, and met a similar fate. Dawnay Day bought up 47 rent controlled apartment buildings in East Harlem hoping to “ease out” the lower paying tenants and rehabilitate the apartments for a more affluent crowd of urban pioneers. The bottom fell out from underneath them and the firm had to sell its yachts and museum quality art collection. As you can imagine, the apartments were not high on their “to do” list. Dawnay Day started charging tenants for basic repairs. As the Times’ article says, “anger, uncertainty and a degree of misery have set in” as the buildings move toward foreclosure.

http://www.nytimes.com/2009/12/22/nyregion/22dawnay.html?hp

Joaquin Rufiles and Josefina Toiralua with their daughter, Stephanie Rufiles, 18 months, in their East Harlem building.

Joaquin Rufiles and Josefina Toiralua with their daughter, Stephanie Rufiles, 18 months, in their East Harlem building.

More Press on My SF Magazine Piece

admin December 13th, 2009 No Comments

Yesterday ProPublica, the independently funded investigative reporting organization featured my SF magazine story on its front page as the editor’s pick of the day.

SF Magazine: The Slumlord Bubble

admin December 8th, 2009 No Comments

Check out my newest piece of investigative journalism, the cover story for the December issue of San Francisco Magazine.

Eighteen months in the making, War of Values reveals how the city’s dominant landlords, the Lembi family of CitiApartments fame, bought up every building they could get their hands on, from the Tenderloin’s rattiest dumps to Nob Hill’s ritziest penthouses, with an audacious plan to drive up everyone’s rent. And their money came from the same financial geniuses who brought the world economy to its knees.

The buzz is growing. See the comments at local real estate blog Socket Site to see some of the commentary. For more discussion, take a look at Curbed SF.