Skyline Realty's goon squad

Is one of SF's biggest landlords using muscle to get around rent control laws?

By G.W. Schulz


You could call them Skyline Realty's private army: at least four burly men who, allegedly, intimidate and harass tenants who've gotten on the bad side of the company, one of the city's biggest landlords.

For Maurice Sharpe, problems with the squad started in 2003, when Skyline bought the Tenderloin apartment building he calls home.

Shortly after Skyline purchased the property, Sharpe and his partner, David Warnecke, were told to meet with the team's head honcho, Andrew Hawkins, a name quite familiar to tenants living in Skyline buildings.

Sharpe says Hawkins, a 40-year-old security guard who is licensed to carry a handgun, promptly threatened to boot the couple because they were technically violating their rental agreement. "As soon as they bought the building, they started at our throats right away," Sharpe told the Guardian. "They told us they were going to kick us out."

Skyline, it seems, had noticed that although the two had lived together for years, only Warnecke's name was on the lease. The city's rental laws allow domestic partners to share an apartment even if both people aren't listed on the lease. But the law requires such couples to formally register as domestic partners with city hall.

Warnecke and Sharpe quickly filed the paperwork to become domestic partners and thus staved off eviction; today, they're still dwelling in the unit, a studio rent-controlled at $650 per month, but the couple says Skyline's foot soldiers still come by the apartment to warn them not to be late with the rent.

Those who have actually been evicted by Skyline aren't as easy to get hold of, but their names appear in stacks of wrongful-eviction claims piling up at the Rent Stabilization and Arbitration Board.

Hawkins is described in rent board records as Skyline's "director of tenant relations." Yet more than a dozen tenants, lawyers, and advocates we interviewed recently say Hawkins and his "tenant relations" team actually serve a more nefarious purpose: helping Skyline frighten tenants out of rent-controlled units. Once the old tenants are gone, Skyline can do minor renovations, hike up the rents, and rotate in a new class of well-heeled renters.

While the evidence is largely circumstantial, this doesn't look like some paranoid conspiracy theory. According to allegations made last year in civil court, Hawkins has made some pretty revealing statements, telling one tenant's son who was house-sitting for his father, "I run people out of their apartments for a living. It's what I do."

In Skyline's defense, company manager David Raynal, who stated that he would handle all the inquiries on the matter, wrote in an e-mail, "We are aware that a very small percentage of our residents have made such allegations. However, the vast majority have greatly appreciated our efforts, and Mr. Hawkins's efforts, to help provide safe housing for all of our residents."

During the past 15 years, Skyline, a family-owned company helmed by Frank Lembi, has quietly become one of the town's biggest landlords. Skyline and its affiliated companies own at least 130 residential buildings in San Francisco, according to a list compiled internally by the company and obtained by us. State incorporation records also connect Skyline's corporate address to several boutique hotels, property management and maintenance outfits, commercial properties, and even a chain of ATMs known as Swipe USA.

When the Lembi family bought Nob Hill's 44-unit Park Lane apartments, at Sacramento and Mason Streets, for $38 million early last year, the deal, on its surface, looked like a poor investment. The units were rent-controlled and could not be converted to condominiums, and the Lembis appeared to have overpaid simply to beat out the competition.

"The Lembis, longtime landlords best known for running Skyline Realty, are apparently willing to put prestige before profit," the San Francisco Chronicle gushed at the time.

Skyline, however, has a penchant for aggressively exploiting loopholes in the city's tenant laws and squeezing as much money as possible out of its properties.

Just a few months after the Lembis bought the building, Hawkins dragged longtime Park Lane resident Stephene McKeen, a 70-year-old woman suffering from emphysema who'd lived in the unit for nearly 20 years, before the rent board. He claimed that because she spent her summers at a property she maintained in Napa, she was no longer a "tenant in occupancy," and thus Skyline could raise her rent.

Hawkins drove to McKeen's Napa property in early September and personally slapped her with a "civil subpoena and request for production of documents," according to rent board records. Problem was, Hawkins didn't have the authority to prepare a subpoena: As an administrative law judge later noted, subpoenas aren't allowed in rent board cases.

Still, Hawkins submitted to the board several photographs he'd taken of the inside of McKeen's apartment during a "periodic inspection." A number of tenants allege that such inspections — sometimes conducted without notice — occur often, and photos are taken by Hawkins or his crew. Those photos are used as evidence in rent board cases. In this case, Hawkins claimed the photos proved McKeen only visited the Park Lane apartment occasionally.

The judge disagreed and tossed the case.

From interviews, and a review of court and rent board records, it's clear lots of Skyline tenants have similar stories.

William Tise began living with his girlfriend at 1547 Clay in 1994, six months after she moved in. A Skyline subsidiary known as CitiApartments bought the 27-unit building last August, and since then, Tise said, renovations, including lead paint removal, have made their lives miserable. In February an inspector with the San Francisco Department of Building Inspection (DBI) cited the contractor and CitiApartments for multiple violations associated with the lead paint and fined them $3,300, according to city records.

It's not clear what Skyline is doing with the building, but if the company's aim is to empty out the long-term tenants, it's working: Tise says only 6 out of 27 units remain occupied.

"The health department came a couple of days ago," Tise said recently while sitting in the family's rent-controlled, $750-a-month, one-bedroom apartment. "I have a son, and my girlfriend's pregnant. We all had to get lead testing. [Skyline] offered us $25 a day to stay in a hotel. But where are we going to stay for $25?"

Despite all the construction workers tromping around the building, Tise said he's had trouble getting Skyline and its contractors to fix up his run-down apartment. After he made several complaints about the stove, a gas leak, and other problems to the company, to its contractors, and to the DBI, he said Skyline's security agents began making frequent appearances at his door, demanding he meet with Hawkins and another man working for the company, Dan Molieri.

George Rush, a lawyer who's represented tenants in three cases against Skyline, said the company's tactics are unparalleled. "They really push the envelope as far as what you can get away with in landlord-tenant law," Rush said. "The intent of the law is to protect tenants to a degree, and they twist that law. They're very aggressive. They make it very clear that they're in the business of making money."

Gary Near, who lives with his girlfriend at Skyline's Nob Hill Manor, on California Street, said his building has had chronic problems with security.

When Skyline failed to improve the situation in the 37-unit building, Near called the DBI to complain about "the repeated sighting of vagrants in common areas." A DBI official later discovered a wastebasket in the laundry room "filled with fresh feces and urine," as well as laundry room surfaces "soaked with urine," according to city records.

After the complaints surfaced, Near, like Sharpe, got a visit from Hawkins. Near said Hawkins threatened to evict him because he wasn't on the lease; his girlfriend has lived in the rent-controlled apartment for 20 years, and Near says he moved in 9 years ago.

At this point he hasn't gotten an eviction notice, but he has nothing nice to say about Skyline. In Near's opinion, "They fuck the city and gouge tenants whenever they can."

Skyline's Raynal said housing-code violations do occur at the company's property, but he claims the firm addresses them promptly. "We recognize that this is a challenging aspect of being a landowner in San Francisco," he stated in an e-mail. "Code violations are corrected immediately, but, for various reasons, it may take some time before they are 'signed off' by the Department of Building Inspection."

Though many tenants have simply moved out to avoid further clashes with Skyline, others have challenged the company and Hawkins in court and before the rent board, mostly in wrongful-eviction claims.

While trolling the civil court data banks, we came across at least nine lawsuits against Skyline and the firm's many subsidiaries. For his part, Hawkins has been named as a defendant at least seven times in lawsuits since 2000, and at least two tenants have sought restraining orders against him.

Last April 29 tenants living at Skyline's 725 Ellis St. building filed suit, citing "severe habitability defects" ranging from a busted elevator and heaters to cockroach and bedbug infestations.

Many of the tenants moved out, according to court records, due to the substandard conditions or to "harassment by [Skyline] and their agents." One of the folks who fled was Christy Collins, who was allegedly harassed and intimidated by Hawkins after she attempted to organize the tenants and force Skyline to clean up the property. The bedbug problem, she said in a phone interview, had consumed the building, and Skyline's pest-control attempts had failed.

"My friends didn't want me to go to their homes," Collins told us. "I couldn't sleep. And [Skyline] didn't want to fix the problem. They said, 'Hey, this isn't a big deal.' "

Hawkins sent her a letter claiming it was a violation of her lease and of San Francisco ordinances to distribute fliers to tenants informing them of their rights. Another letter from Hawkins states that bedbugs "do not pose a health risk to human beings" and suggests the pests had invaded the structure because of the tenants' poor hygiene.

Collins said the experience has driven her out of San Francisco for now. She's living elsewhere, with a relative, until the suit wraps up. "I loved San Francisco, but I was forced to leave," she said. "I miss it. As soon as this is over, I want to go back."

In December 2002, Gary Gillespie, a wheelchair-bound man severely afflicted with AIDS symptoms, filed suit alleging Hawkins and his team had pushed him to the ground, placed his caretaker in handcuffs, forced their way into his apartment "without proper notice or just cause to enter," and searched through his belongings. Other times, the suit states, Gillespie's caretaker was barred from entering the building. Gillespie claimed the team verbally harassed him and once asked him when he was "going to die."

Gillespie alleged the harassment was "intended to cause" his "ouster" from his apartment, at 635 Ellis, where he'd been since in 1997. The man's attorney, Scott Weaver, said in an interview that the case had to be dropped after Gillespie died, in 2003. But Weaver said he didn't believe the Gillespie case was an anomaly.

"I think you're going to see more cases in the future, because they're buying up a lot of buildings," Weaver told us. Other tenants' lawyers we interviewed said Skyline should expect a campaign of new litigation in the near future.

Via e-mail, Skyline manager Raynal said the company's employees have never threatened physical assault "on any of our residents."

"We investigate all such allegations and have never found one to have merit," Raynal stated. "As to evictions, I strongly encourage you to research the results of the cases we have brought. Not only will you find a record of success which justifies our bringing those actions, but that the number of such actions is extremely small relative to our size."

Nonetheless, 10 Skyline tenants living at 1025 Sutter were awarded $120,000 by a San Francisco judge, in December 2003, against Skyline and Hawkins, after the tenants alleged the firm "illegally attempted to force [them] to move out of their homes." The tenants also claimed Hawkins tried to force the tenants "to move permanently to other units owned and/or operated by [Skyline] at higher rates." Later, the court granted them another $72,000 in legal fees.

David Crow, another tenants' attorney who volunteers for the San Francisco Tenants Union, said he's heard complaints from approximately 50 current and former Skyline tenants over the last two years. "In some sense, these allegations are nothing new," Crow said. "But if you have a landlord who is single-handedly responsible for tenants living in 7,000 units, it's something that you need to deal with."

When asked how the company felt about the city's rent-control laws, Skyline's Raynal replied in an e-mail, "We long ago accepted the reality of San Francisco's rent control laws, and therefore, do not spend a lot of time engaging in internal debates as to their merits."

He portrayed Skyline as a model landlord. "Every year we renovate many apartments, upgrade common areas, and improve neighborhoods," his e-mail stated.

As for Hawkins and the other "agents," Skyline says they're security personnel whose job is to protect tenants. Raynal wrote that in San Francisco, "part of a large metropolitan area, proactive steps are required to ensure security.

"Additionally, the very real threats to our security personnel, and the means necessary for their protection, should not be minimized," he wrote.

At least one housing advocate we interviewed said that, in a curious sense, he preferred dealing with Skyline. Brian Basinger of the AIDS Housing Alliance told us that with Skyline and Hawkins, he always knows what to brace himself against: a scorched-earth approach to landlord-tenant disputes. "These are all strategies for earning more revenue," Basinger said, "and they're pretty open about it." *