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Zoning: Hotels Win Two rounds Against San Francisco Over Tourist Use

The City of San Francisco has been dealt setbacks in two cases in which the city attempted to argue that two hotels were not "grandfathered" as tourist hotels and therefore are subject to the city's hotel conversion ordinance because of alleged conversion from residential to tourist use. The two cases appear to have interconnected issues that may need to be resolved later. In the first case, one First District appellate panel concluded that the hotel needed to prove "actual tourist use." In the other, a different First District panel stated that the city's certification of some rooms as tourist hotel rooms was sufficient and proof of actual tourist use was not necessary. In the notorious case of the San Remo Hotel, the First District Court of Appeal, Division Five, remanded the question of whether the hotel was a legal nonconforming use to the trial court for technical reasons. However, the court made it clear that the trial court should find in favor of the hotel owner rather than the city. The owners of the San Remo have been fighting the city's attempt to impose a $567,000 fee under the city's Hotel Conversion Ordinance. The city levied the fee because the owners allegedly converted the hotel from residential to tourist use. In August, the First District ruled that a trial can move forward for an unconstitutional taking. (See CP&DR Legal Digest, September 2000.) In a newly published portion of the case, the court remanded the non-conforming use question back to the trial judge. If the hotel was a legal non-conforming use under the North Beach Neighborhood Commercial District ordinance prior to the 1987 passage of the Hotel Conversion Ordinance, then the fee would presumably not be applicable. The trial judge had ruled on the non-conforming use issue as a matter of law rather than a factual basis, which is why it was remanded. The city argued, among other things, that some rooms were rented for residential use prior to 1987 and therefore tourist use of the entire hotel was illegal. The appellate court saw things differently. "The hotel remained at all relevant times factually and legally a hotel renting to tourists, not a commune, a fraternity house, or any of the other uses specified in the ‘group housing' category," wrote the court: "If appellants were not operating a ‘hotel', then one might wonder why the City always issued to it a use permit as a hotel, collected hotel taxes on its tourist rentals as a tourist hotel, and required a ‘mitigation fee' under the HCO when it was ‘ converted' from a residential ‘hotel' to a tourist ‘hotel.'" In the other case, a different First District panel concluded that the city's certification of hotel rooms as tourist units established their lawful use as tourist hotel rooms and no proof of actual tourist use is required. The Tenderloin Housing Clinic had sued the Astoria Hotel, claiming that the hotel had violated the city's residential hotel conversion ordinances. In order to establish the hotel's lawful status as a tourist hotel, both the city zoning administrator and the trial court required the Astoria to show actual tourist use. But the appellate court disagreed. "The Planning Code does not specify that a use must have ‘actually' existed to be deemed permitted," the court held. "It states that a use must have ‘lawfully' existed." The Cases: San Remo Hotel v. City and County of San Francisco, No. A083530, 2000 Daily Journal D.A.R. 9877, issued August 8, 2000, full publication September 6, 2000. Tenderloin Housing Clinic Inc. v. Astoria Hotel, No. A088494, 00 C.D.O.S. 7003, issued August 18, 2000. The Lawyers: For hotels in both cases: Andrew Zacks, (415) 821-0347 For City and County of San Francisco: Andrew Schwartz, deputy city attorney, (415) 554-4620 For Tenderloin Housing Clinic: Stephen L. Collier, (415) 771-9850.
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