Lembi's legacy - Page 2

Labor strife at the Hotel Frank follows its namesake's sullied reputation

Hotel workers and their allies recently picketed the Hotel Frank

Yvonne Lembi-Detert changed the name of the Maxwell to the Frank Hotel and rechristened the York as Hotel Vertigo after the Alfred Hitchcock movie set in San Francisco. Those familiar with the deal say she paid top dollar for the hotels — $35 million for the Maxwell, which had sold a few years earlier for $18 million. She then borrowed another $10 million to renovate the hotel she had renamed for her father, putting up the Hotel Metropolis in the Tenderloin as collateral.

"This was a vanity project, nothing more and nothing less, Yvonne's legacy to father Frank," one worker at the hotels told the Guardian.

Officials at Personality said Lembi-Detert was on vacation and unavailable for comment, but Director of Operations David Chin told us, "The purchase price was what the market bore at the time" and that the renovations were prudent. "The factor that drove the hotel to foreclosure was really the economy."

Although the loans for the hotels came from a Japanese-based corporation called Nomura, they were packaged along with other troubled loans into collateralized debt obligations (CDOs) — those toxic financial instruments that played such a key role in the crash of the banking system in 2008 — eventually coming to be controlled by Well Fargo.

As the Hotel Frank was put through extensive and expensive renovations that were never completed, the economy turned sour and the Lembis fell far behind in their loan payments. Wells Fargo finally took ownership of both the Frank and the Metropolis in May, contracting the management out to Provenance, which moved quickly to try to turn the financially troubled hotels around.

Workers at the two hotels, most of whom had been there for decades, say the new management team took an aggressive posture from day one, announcing increased workloads, longer work days, suspended vacation pay, and new medical plans with steeply higher costs to workers.

But they arrived in a town with a hotel union energized by clashes with management at hotels all over the city, so the workers at the hotels resisted the changes and their Local 2 colleagues have rallied to their defense. When thousands of workers and their progressive supporters marched through the streets of San Francisco to the Grand Hyatt in July, they stopped at the Hotel Frank along the way and unfurled a banner that read "Frank and Metropolis Hotel Workers United to Fight Provenance and Wells Fargo." And on Sept. 8, both hotels were added to Local 2's boycott list.

Singh said Provenance is unfairly trying to hold workers at the hotel responsible for the bad financial decisions that the Lembis made, and he called on Wells Fargo to absorb those financial losses without having its agents attack the union.

"It was not based on anything the workers have done," Singh said of the financial situation at the hotels. "This huge bank is asking the workers to bear the brunt of this financial strategy even after being bailed out by taxpayers."