S.F. Japantown hotel conversion proposal called off, but work continues

Many Japantown community members breathed a sigh of relief while housing advocates lamented KHP Capital Partners’ decision to rescind its interest in selling the Kimpton Buchanan Hotel in San Francisco’s Japantown to the city. If sold to the city, the hotel, currently serving as a temporary shelter-in-place hotel for homeless people, would have been converted into permanent supportive housing, which opponents of the deal say would adversely affect Japantown’s microeconomy.

KHP Capital Partners said in an Oct. 19 statement to the Nichi Bei Weekly it was withdrawing the hotel from the “sale process” to the city, citing the community’s concerns.

“While the City continues its efforts to purchase additional sites suitable for conversion, the Kimpton Buchanan Hotel will continue in its current use as a temporary housing location,” the statement said. “Following conclusion of this program, we look forward to continuing to serve the City as a tourist hotel and contributing to Japantown’s economic recovery.”

Meanwhile, a spokesperson for the Kimpton Buchanan Hotel told the Nichi Bei Weekly the hotel operators “loo(k) forward to operating the Buchanan once it reopens next year as a boutique hotel and strengthening our long-standing partnership with the Japantown community.”

Andy Lynch, a spokesperson for Mayor London Breed, told the Nichi Bei Weekly Oct. 19, “The process of acquiring buildings is complex and we respect (the) decision of the owners to not to move forward with a sale of the Buchanan. We’re currently negotiating on a number of properties throughout the city to add to the two properties we have already acquired and the three others we have under contract, including the two properties that were approved today by the Board of Supervisors.”

Meanwhile, advocates for the sale expressed their disappointment. “We were hoping that J-Town concerns could be addressed AND we could have wonderful new neighbors in the building, especially given how so many of our unhoused population and their families were displaced out of the Fillmore area,” Jennifer Friedenbach, executive director of the Coalition on Homelessness, told the Nichi Bei Weekly in an e-mail. “We were hoping that all three buildings — Majestic, Buchanan and Gotham that have been identified in D5 would be turned into housing, so losing the Buchanan is a loss.”

Supervisor Dean Preston, who oversees Japantown as part of his district, had called on the city to prioritize exploring the Hotel Majestic and Gotham Hotel in his district instead of the controversial Buchanan hotel. But he claimed in an Oct. 4 letter to the head of the city’s Department of Homelessness and Supportive Housing that the city was slow to pursue the other two hotels.

Months-Long Controversy
HSH introduced a slate of properties to consider purchasing and converting into permanent supportive housing Aug. 17. Among the four properties recommended, only the Kimpton Buchanan’s purchase was postponed to allow the city to collect more community input before making a final decision. The proposal to purchase the hotels is part of Breed’s Homelessness Recovery Plan, which aims to add 1,500 new units of permanent supportive housing to the city by relying on money from the city’s Proposition C sales tax and the State’s Project HomeKey.

While many opponents of the sale, largely the Japanese American community in the city’s Japantown, said they supported adding more supportive housing, they said the city’s decision to purchase the Hotel Buchanan reminded them of the social upheaval caused by the city’s redevelopment of Japantown in the 1960s and 1970s, and added that the loss of the tourist hotel would devastate the neighborhood’s small businesses.

“The potential sale of the Hotel Buchanan triggered deep trauma for so many members of our community, including those who were forcibly evicted by San Francisco’s Redevelopment Agency,” Jon Osaki, executive director of the Japanese Community Youth Council, said. “Unfortunately, so many today do not fully understand or appreciate the massive impact that the forced removal of our community continues to have on Japantown. I am grateful that KHP came to understand that they have operated an extremely successful tourist hotel in this community and it would be completely inappropriate to sell the property knowing the economic damage that would result from the conversion of use.”

Meanwhile, Cathy Inamasu, executive director of Nihonmachi Little Friends, expressed her thanks to those who helped stop the sale of the hotel, calling it “a collaborative effort on the part of many.” The preschool neighboring the hotel initially welcomed the emergency shelter-in-place program that started in June of 2020, but later came out in opposition to the sale, saying the school’s staff had been dealing with aggressive homeless people, discarded needles and human feces since the temporary program moved in.

“It is unfortunate that many opponents of our efforts continue to see Japantown as being NIMBYs, when the real issues are safeguarding our 4 square block historic community from further detriment and the need for an open and planned-out process for the City and HSH to work together with communities,” Inamasu said in an e-mail to the Nichi Bei Weekly.

Prior to KHP’s withdrawal, some Japantown leaders met with Breed Sept. 17 to ask the city to reconsider its plans to pursue the Buchanan Hotel. According to those who attended the meeting, Breed had asked her staff to seek out economic data on what impact the conversion of the hotel into housing would have on the community. The mayor’s office, however, said the city was not working on a report, with Lynch previously telling the Nichi Bei Weekly Breed had only agreed to “look at economic data as one (of) many factors around potential acquisitions.”

With no city-driven research seemingly being collected, Japantown community members started drafting their own report to present to HSH. Japantown Task Force President Sandy Mori reported during the organization’s Oct. 14 Land Use/Transportation committee meeting that she, along with Steve Nakajo, the Task Force’s executive director; Daniel Byron, director of asset management at the Beverley Hills, Calif.-based 3D Investments LLC; Greg Viloria, the director of community affairs and marketing for the Japan Center Malls; and Grace Horikiri, executive director of the Japantown Community Benefits District were working with Peter Hirshberg, an urban economist who lives about a block away from the Buchanan Hotel, to develop their own economic impact report on what the loss of the hotel would do to the local economy.

Work Continues on Impact Report
After news spread that KHP had rescinded its intent to sell, Mori said during the Task Force’s Oct. 20 board meeting that work on the report would continue. Mori said the report could help them promote and market the ethnic enclave in the future.

Hirshberg was initially connected to Mori through Darlene Chiu-Bryant, the executive director of GlobalSF. Hirshberg is a board member of the nonprofit economic development organization in San Francisco and had criticized the city’s plan to purchase the Buchanan since the first Aug. 26 public meeting HSH hosted.

Hirshberg told the Nichi Bei Weekly the report’s scope has been expanded since the immediate issue of the hotel’s sale has passed. He said the working group is collecting data to show how hotel visitors impact the Japantown economy, partially through data provided by 3D Investments, the Hotel Buchanan’s former owners up until 2014, and the current owners of the Japan Center Malls. Blending anonymized cellphone GPS data, publicly available tax data and other information, Hirshberg said he hoped to show how the hotel plays a vital role in Japantown’s economic ecosystem.

“If you go downtown to the Palace, you’re not going to be spending all your money on Market Street, you’re going to Union Square, you’re going to dinner in places, you’re going up to wine country,” Hirshberg said. “The data seems to show that if you go to the Buchanan, you’re much more likely to be going to that neighborhood and spending more.”

Hirshberg called the decision to convert the once booming hotel into housing a nihilistic tactic that envisioned the economy not recovering in Japantown, and a non-option for the ethnic enclave.

“(Tourism) could take a while to come back, but that doesn’t bother me, because if you throw in the towel and say it’s not going to come back, you’ve just killed off one of the huge small business districts in the city and that’s a terrible thing to do to a city,” he said.

Meanwhile, while the immediate threat of the sale is now past, Mori said she remains on guard against the hotel’s owners.

“As everybody knows, the statement that was made in the press by KHP was that they listened and heard the community and that’s why they did what they did,” Mori said during the Oct. 20 board meeting. “Which we know is B.S. … We’re trying to find out what the real story is, but that’s still to be determined.”