SF vs. Frank Lembi - Page 3

Real estate mogul stonewalls its tenants and the city as the banks foreclose

Last year the taxes paid on the building came to a little more than $13,000, based on its previous $1 million value.

Then there is the 31,812-square-foot apartment building on 1735 Van Ness Ave. that Lembi bought back in June 2006. According the city records, the taxes paid last year on the property were nearly $48,000 based on a market value of $3.9 million. Recently the building was reassessed with a value of $9.6 million. This year's taxes amount to more than $114,000. Whether or not the Van Ness Avenue building is a case in which the Lembi Group also withheld information is currently being looked into by the Assessor's Office.

Yet on the Russian Hill parking garage, Lembi is still getting away with withholding the necessary documents for an accurate reassessment — and time is running out. In a little over a year, the statue of limitations runs out and the city will no longer be able to collect anything from Lembi.

Further complicating the city's efforts to collect is the fact that some other the properties in question have been foreclosed on.

When the Russian Hill garage and other Lembi properties went back to the banks, the Assessor's Office looked into what could be done to collect the city's lost revenue. Its solution: a transfer tax. But that was not an option because the bank held the main mortgage, so it wasn't considered a change of ownership.

Even though the parking garage and other properties have slipped out of Lembi's control, he is still responsible for the taxes on them during his period of ownership, according to Ting. But given the experiences of others who have tried to collect money from Lembi, that could be a long, expensive process.

While the Lembi enterprises may be stingy in giving the city and tenants their money, they haven't had a problem making political campaign contributions. Taylor Lembi, grandson of Frank, gave $500 to Mayor Gavin Newsom's reelection campaign in 2006, according to public campaign contribution records, although Newsom's campaign offices returned the money exactly two months later (Newsom's campaign office didn't respond to our questions about the contributions or reason for returning it).

Skyline Properties, parent of Skyline Realty, also donated $100 to Newsom's initial mayoral campaign in 2003, and supported Mayor Willie Brown before that. Lembi continues to be a prominent landlord, the subject of a sympathetic profile by the San Francisco Apartment Association in August 2008.

Yet with lawsuits mounting, the banks foreclosing, and the real estate market slumping, the multigenerational Lembi empire that once controlled more rental units in San Francisco than any other entity appears to be in trouble.

And lest anyone slide under its control unaware, the Lembi empire's many enemies have organized into a group called CitiStop, supported by groups that include the San Francisco Tenants Union and Pride at Work, which argues that "nothing frightens CitiApartments more than knowledgeable tenants."



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