Owner of Two of San Francisco’s Largest Hotels Pulling Out of City: ‘Path to Recovery Remains Clouded’By Ryan Mills
The owner of two of San Francisco’s largest downtown hotels is stopping mortgage payments and going into foreclosure on the properties, stating that the city faces “major challenges” and that reducing exposure to the market is in the best interest of investors.
Park Hotels & Resorts said Monday that it was stopping payment on a $725 million loan secured by the two hotels, the 1,921-room Hilton San Francisco Union Square and 1,024-room Parc 55.
The Hilton is San Francisco’s largest hotel, and Parc 55 is the fourth largest.
Thomas J. Baltimore Jr., CEO of the Virginia-based company, called the decision “very difficult, but necessary,” noting record-high downtown office vacancy, “concerns over street conditions,” and reduced convention business.
“After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market,” Baltimore said in a prepared statement. “Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges – both old and new.”
The announcement comes less than a week after the San Francisco Travel Association launched a $6 million ad campaign – it’s biggest ever – to lure tourists back to the troubled California city.
The Always San Francisco campaign calls San Francisco “the most beautiful city in the world.” It features images of iconic San Francisco landmarks, opening with a drive across the Golden Gate Bridge. The opening ad has scenes of people dancing, drinking, and eating, and includes one pink-haired drag queen, Lady Camden, a one-time contestant on RuPaul’s Drag Race.
“Tourism is vital to the city’s economic recovery,” Joe D’Alessandro, San Francisco Travel’s president and CEO, said in a prepared statement. He added that the campaign is designed to show the “authentic San Francisco experience people love and dream about.”
Michael Shellenberger, the San Fransicko author who has blamed the city’s far left politics for many of its current problems, noted on Twitter the timing of the two announcements.
“San Francisco’s tourism board launched a $6M ad campaign to overcome the city’s global reputation as a drug and crime-ridden hell hole,” he wrote. “Six days later, the owner of two of the city’s biggest hotels announced it was abandoning them because it lost faith that the city can recover.”
Shellenberger pointed the finger at California Governor Gavin Newsom, the former mayor of San Francisco, who he said “spends his days obsessing about how to become president and trolling red state governors.” He also took aim at the city’s current mayor, London Breed, writing that she is “disrespected by her own employees.”
“Neither is capable of making or following through on difficult decisions,” Shellenberger wrote. “They do what the interest groups demand.”
San Francisco has been struggling with rising crime and rampant homelessness and public-defecation crises. In 2018, the Guardian questioned “Why is San Francisco … covered in human feces?” A downtown Whole Foods recently shuttered due in part to spiraling crime. Nordstrom and Office Depot are among other retailers fleeing the city’s downtown area.
In March, members of a CNN crew reporting about crime in the city had their bags stolen out of their rental car. “Got robbed again,” a senior correspondent tweeted in response.
The city has recently been hit with a wave of suspicious claims by homeless residents seeking $10,000 payouts for valuables they alleged were destroyed in homeless camp sweeps.
Earlier this year, the San Francisco Chronicle questioned whether a series of interconnected forces – empty office spaces, shuttered businesses, sharply-reduced mass transit – has trapped the city in “in the biggest ‘doom loop’ of all.”
“This is how San Francisco could die,” the report states.
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