City Attorney Herrera at a City Hall news conference with Deputy City Attorney Yvonne Meré, lead counsel in the Trinity Place investigation.

Herrera subpoenas Trinity over rent-controlled apartments used as ‘SOMA Suites Hotel’

After request for cooperation is met ‘with obfuscation and deflection of responsibility,’ City Attorney moves to compel production of evidence in housing investigation
City Attorney Herrera at a City Hall news conference with Deputy City Attorney Yvonne Meré, lead counsel in the Trinity Place investigation.
City Attorney Herrera at a City Hall news conference with Deputy City Attorney Yvonne Meré, lead counsel in the Trinity Place investigation.

SAN FRANCISCO (Sept. 8, 2015)—City Attorney Dennis Herrera today formally subpoenaed documents and information relating to the apparently illegal use of Trinity Place residential units—including at least 16 rent-controlled apartments—for tourist accommodations as “The SOMA Suites Hotel.”  The administrative subpoenas served on Trinity’s ownership and a single lessee of some 23 dwellings comes after a month of “repeated, unsuccessful attempts” by Herrera’s office to gain voluntary cooperation in a City Attorney investigation of potentially unlawful and unauthorized uses of the properties at 1188 and 1190 Mission Street.

Herrera initially requested cooperation from developer Angelo Sangiacomo and his legal counsel in an Aug. 5, 2015 letter that sought a full account of the uses of residential units authorized under the city’s 2007 agreement for the Trinity Plaza Development Project (since renamed Trinity Place).  But the request was instead met “with obfuscation and deflection of responsibility,” according to a letter from Herrera that accompanied his subpoena to compel Trinity’s production of requested evidence.

“I find your responses on behalf of your clients particularly difficult to accept given the nature and history of the properties,” Herrera wrote to Trinity’s attorney, Andrew Wiegel.  “The Trinity Plaza Development Project permitted your client to build high-density, largely residential buildings that, among other things, would preserve 360 units of rent-controlled housing.  The benefits of those units that your client committed to provide in the Development Agreement continue to be critically important to the City, especially at a time where the paucity of affordable housing is driving out long-term residents, disrupting communities, and altering the very fabric of our City.  Leasing a number of those units to the same individual, under the facts and circumstances we believe to have been the case, violates the letter and spirit of the Development Agreement, and the conditions of approval for the Project.”

A primary focus of the investigation Herrera identified in his letter is the developer’s business relationship with Catherine Zhang and her company, LUMI Worldwide.  According to evidence so far established in the City Attorney investigation, Trinity Management Services entered into leases with Zhang for 16 apartments, each subject to rent-control, and each exclusively intended for residential occupancy.  Apart from recognizing the obvious—that a single individual can’t simultaneously reside in 16 apartments—Trinity’s management knew that Zhang was subleasing the rent-controlled units, according to Herrera, in apparent violation of its own lease provisions expressly forbidding subletting, and its development agreement with the city.  The arrangement may also violate state and local law.

“Leasing a number of those units to the same individual, under the facts and circumstances we believe to have been the case, violates the letter and spirit of the Development Agreement, and the conditions of approval for the Project,” Herrera wrote.  “For these reasons, you have left me no choice but to formally subpoena this information.”

Apart from the 16 rent-controlled apartments at 1188 Mission Street (where “The SOMA Suites Hotel” is located, according to its marketing content), another seven Trinity Place apartments at neighboring 1190 Mission Street were also leased to Zhang for concurrent and overlapping periods. Evidence indicates that Zhang similarly subleased those apartments to tourists for short-term stays.  Although none of the apartments at 1190 Mission Street is subject to rent-control, the use of dwellings in both buildings is restricted to residential housing under terms of the 2007 development agreement and related City approvals.  Herrera today served a similar administrative subpoena on Zhang and LUMI Worldwide.

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