Herrera’s Fillmore Center defense saves 1,113 apartments from condo conversion

City Attorney hails outcome in high-stakes litigation as ‘a major legal victory that protects affordable housing at a time when San Francisco desperately needs it’

SAN FRANCISCO (March 4, 2014) — A Superior Court judge today blocked a protracted legal bid by the Fillmore Center’s current ownership group to convert more than 1,100 occupied rental units in San Francisco’s Western Addition neighborhood into condominiums.

In a final trial court decision issued late this morning, Judge Curtis E.A. Karnow sided with City Attorney Dennis Herrera in two parallel legal actions, both filed by Fillmore Center Associates in 2008, ruling that the landlord was time-barred from resurrecting condominium conversion rights that prior owners had surrendered nearly two decades ago. Today’s 17-page statement of decision similarly rejected the plaintiff’s arguments — including some Karnow called “bizarre” — that Fillmore Center Associates was legally entitled to convert the rental units into condos based on an array of property rights and alleged preemptions of San Francisco’s Condominium Conversion Ordinance.

“This is a major legal victory that protects affordable housing at a time when San Francisco desperately needs it,” said Herrera. “The displacement of Western Addition tenants from more than 1,100 apartments in the midst of the current housing crisis would have been unthinkable. And the high stakes of this potentially devastating legal attack justified the resources we deployed to defend against it. I’m very proud of the extraordinary work done on this case by my office’s Land Use Team, especially Victoria Wong and Kristen Jensen. And I’m grateful to Judges Karnow and Kramer for their thoughtful consideration of the myriad issues these complex lawsuits presented.”

Karnow’s ruling today, which made explicit reference to 459 residential units, followed a Sept. 5, 2012 decision by Judge Richard A. Kramer during an earlier phase of the trial that applied to the balance of the units. As a result, today’s outcome preserves 1,113 units in the Fillmore Center as rental housing in perpetuity. Twenty percent of those units are reserved for low-income residents through 2017. Though the court’s statement of decision is final, Judge Karnow has set a case management conference for March 13 to determine whether any further proceedings are required in the nearly six-year-old litigation.

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Fillmore Center Associates is the latest in a string of owners of Fillmore Center, which is generally bounded by Fillmore, Steiner, Turk and O’Farrell Streets, in a one-time redevelopment area of the Western Addition. Though Herrera’s office presented evidence that Fillmore Center’s original developers acknowledged they did not possess condominium subdivision rights to the residential apartment complex, the new owners began asserting condo conversion rights in pursuit of windfall profits after purchasing the property in 2004. Fillmore Center Associates’ contention led to two lawsuits against the City: a declaratory relief action filed on July 3, 2008, and a petition for a writ of mandate filed on Oct. 9, 2008.

Apart from the key aspect of today’s ruling that Fillmore Center Associates’ claims were time-barred, Judges Kramer and Karnow additionally rejected four legal theories raised by the plaintiffs, ruling that Fillmore Center Associates did not possess sovereign immunity from the Condominium Conversion Ordinance; that airspace subdivision maps that exist for some of the buildings did not authorize residential condominiums; that the plaintiff had no vested right to condominiums; and that the Condominium Conversion Ordinance is not preempted by California’s Community Redevelopment Law, the expired redevelopment agreement for the area, or the land disposition agreement between the original developer and the former Redevelopment Agency.

The cases are: Fillmore Center Associates v. City and County of San Francisco et al., San Francisco Superior Court No. 477064, filed July 3, 2008 (Declaratory Relief Action); and Fillmore Center Associates v. City and County of San Francisco et al., San Francisco Superior Court No. 480768, filed Oct. 9, 2008 (Petition for Writ of Mandate). Additional documentation from the case is available on the City Attorney’s website at: https://www.sfcityattorney.org/.

Related:

PDF icon PDF of the Fillmore Center Trial Court Decision Presskit (March 4, 2014)

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