SAN FRANCISCO--(BUSINESS WIRE)--March 4, 2002--
San Remo Hotel Will Continue Battle at Federal Court Level; Weighs Option to Petition U.S. Supreme Court
After a decade of litigation against the City of San Francisco over private property rights, owners of the historic 62-room San Remo Hotel at 2237 Mason Street will challenge the California Supreme Court ruling announced today at the federal court level, possibly taking their case ultimately to the U.S. Supreme Court.
Issuing a 4-to-3 split decision reversing a state appellate court ruling, the state's highest court upheld the city's imposition of a $567,000 conversion fee, paid under protest in 1993 by hotel owners, brothers Tom and Robert Field. The fee permitted the San Remo to continue renting rooms primarily to tourists rather than to low-income residents.
The Fields sued the city for an unconstitutional taking of private property, citing provisions in a controversial law requiring certain smaller hotels to replace or to pay for any housing lost when rooms are not reserved for low-income residents. In 2000, the state high court agreed to review the court of appeal decision that the Fields were entitled to a trial on the facts of the case, to determine if an unconstitutional ordinance restricted their legal use of rooms.
San Remo attorneys Paul Utrecht and Andrew Zacks point to strong dissenting opinions in the decision as substantial reasons for asking the nation's highest court to review the ruling. Issues involving key provisions in the Fifth Amendment, as they apply to this case, are still unresolved and deserve to be examined with greater scrutiny, said Utrecht. Protecting private property is as much a part of our Bill of Rights as freedom of speech or religion.
When you review the reasoning of Justice Janice Rogers Brown, you realize the plight of two model property owners in San Francisco has reached center stage in the history of takings law. We believe the U.S. Supreme Court will ultimately accept this case, and we will prevail.
Zacks added, It's a civic disgrace that the public has paid hundreds of thousands of dollars for a seemingly obsessive battle waged by the City Attorney to defend vague, convoluted laws that never should have been drafted in the first place. Unfortunately, it looks like those citizen-subsidized expenses will now continue -- as will costs and aggravation for the Fields.
In her dissenting argument, Justice Brown notes: Private property, already an endangered species in California, is now entirely extinct in San Francisco. The city... has implemented a neo-feudal regime where the nominal owner of property must use that property according to the preferences of the majorities that prevail in the political process -- or worse, the political powerbrokers who often control the government independently of majoritarian preferences.
The Fields remain committed to the legal course before them: We want a refund for an unjust fee and the return of our commercial zoning status, according to Tom Field. We'll maintain the historic uses of the hotel, continuing to attract budget-conscious tourists from around the world, with room rates starting at $55 a night. And our current residential guests will not be asked to move. The city should be encouraging tourism and rewarding property owners for offering attractive rates, not driving them out of business with excessive restrictions and fines.
Organizations supporting the hotel owners with amicus briefs included the Pacific Legal Foundation, the Washington Legal Foundation, the Home Builders Association of Northern California and the Coalition for Better Housing. The Attorney General of the State of California, the California State Association of Counties and the International Municipal Lawyers Association filed briefs supporting the city.
The Fields invested more than one million dollars in authentically restoring the 95-year-old Victorian, saving it from condemnation.
Originally built by Bank of America founder A.P. Gianinni after the great earthquake and fire in 1906, the property freely operated for nearly a century as a commercially licensed tourist hotel that also welcomed long-term residential tenants. The Fields charge the city construed regulations to systematically and unlawfully revoke zoning rights acquired when they bought the hotel in 1971. They claim the city relied on provisions in a complex Residential Hotel Conversion and Demolition Ordinance, enacted years after their purchase, and retroactively applied sections of the city's Planning Code, added in 1987, to reclassify the hotel as residential group housing. The city also insisted the San Remo offer lifetime leases to long-term residential tenants, who had already been welcome indefinitely.
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