Trinity Place

After a month of unsuccessful attempts to secure the cooperation of developer Angelo Sangiacomo, City Attorney Dennis Herrera has just issued subpoenas for documents and information relating to the investigation into the likely illegal use of 23 Trinity Place apartments, including 16 rent-controlled units, as short-term rentals in San Francisco.

According to evidence so far established in the City Attorney investigation, Trinity Management Services entered into leases with Catherine Zhang and her company, LUMI Worldwide, for 16 apartments, each subject to rent-control, and each exclusively intended for residential occupancy. Apart from recognizing the obvious — that a single individual can’t simultaneously reside in 16 apartments — Trinity’s management knew that Zhang was subleasing the rent-controlled units, according to Herrera, in apparent violation of its own lease provisions expressly forbidding subletting, and its development agreement with the city. The arrangement may also violate state and local law.

Apart from the 16 rent-controlled apartments at 1188 Mission Street (where “The SOMA Suites Hotel” is located, according to its marketing content), another seven Trinity Place apartments at neighboring 1190 Mission Street were also leased to Zhang for concurrent and overlapping periods. Evidence indicates that Zhang similarly subleased those apartments to tourists for short-term stays. Although none of the apartments at 1190 Mission Street is subject to rent-control, the use of dwellings in both buildings is restricted to residential housing under terms of the 2007 development agreement and related City approvals.

According to Herrera’s office, repeated requests for cooperation have been met with “obfuscation and deflection of responsibility.” And in addition to compelling evidence from Sangiacomo and Trinity, administrative subpoenas for Zhang and LUMI Worldwide have just been issued as well.

35 thoughts on “Developer Subpoenaed For Investigation Into Short-Term Rentals”
      1. He has no incentive to participate in a nickel and dime scheme like this. He financed tat development with his own cash – the chump change from a stupid scheme like this would not be worth his time. However, his employees….

        1. For those of us not addicted to tugging our own forelocks, I would be completely unsurprising if the Father of SF Rent Control knew exactly what was going on. He probably resents every single aspect of the original development agreement with the City requiring him to provide these rent control replacement units – and is most likely trying to undermine his obligations at every turn.

          Because that’s who he is.

  1. For you newcomers and not-so-long SF residents, Angelo is the Father of SF Rent Control. His greed back in the late 70’s directly led to rent control in SF.

    1. Ummm…he might not have been a perfect player, but there was hyperinflation at that time. i.e. Not all his fault.

      1. When rent control passed in SF in June 1979 the inflation rate was 10.9%. That’s high but nothing like “hyperinflation.” I’ve been in countries with hyperinflation, where we exchanged USD for local currency nearly every day and the inflation could be 11% from the time the banks closed on Friday to when they opened on Monday. The USA has not had hyperinflation at anytime during the long life of Angelo Sangiacomo.

        FWIW, the average inflation rate in the US in the 1970s was about 7%. Again high, but not as high as the rent increases of Mr. Sangiacomo that helped ensure passage of rent control in SF.

        I don’t fault Sangiacomo for trying to get as much wealth as he could from his properties then or since then. That’s how he has run his business and lead his life. His wealth and reputation are earned. And the community has responded then and since then with the legal tools available. This is just another round.

  2. I rented in a Sangiacomo building on Bay Street in the late 70’s, and had to pay a non-refundable application fee of $75 fee to rent the apartment. I think it was later deemed illegal in an action against Mr Sangiacomo.

  3. I’m too young to know who this guy was but I already hate him because of his bait and switch with the Trinity Place design. This guy is a uniter of all generations. Oh and also because they flood craigslist with their desperate attempts to rent their cheap crap. When I die, please God, don’t let them say I was cheap.

  4. Sangiacomo is a shame….His tactics created rent control back in the 70’s. His value engineering the huge development @ 8th & Mission into the mess it is should have the planning commission explain how they allowed this. For someone who made so much money in SF, you would think that Sangiacomo would want to leave a legacy project in the city that made him so much money. He should hang his head in shame, he is the very definition of a greedy developer with no interests than his own personal fortune. Only good news is he is in his 80’s and probably at the end of his long corrupt career

  5. guilty until proven innocent? do you really think this guy needs to sublet 16 apartments to supplement his income?

    1. He didn’t need to nickel and dime every tenant 40 years ago, but he did. Study your SF history – this is the guy that quite literally was such an obnoxious, money-grubbing landlord that SF enacted rent control in response to him. And he hasn’t changed his ways since. He fought the tenants at Trinity Plaza (and Chris Daly) for years before agreeing to the terms of the development agreement for this project.

      And this isn’t a court of law – its the Internet. If the Internet isn’t for rampant speculation, then I don’t know what is.

  6. …this father of SF rent control was only trying to build high end apartments to this sad location for over 30 years. The city prevented him from doing it and fought him every step of the way. What was the result: 30 years of homeless people sleeping, urinating, overdosing, and using this block as a wasteland. (I’m a SF native but currently live in NYC.)

    If SF would only learn from NYC, when you allow developers to build nice buildings, it improves the neighborhood, schools, roads and infrastructure. It makes no sense to me, in NYC, my kids go to outstanding public schools, have great parks, libraries, museums most paid for by the developers who have built nice buildings and cleaned up bad neighborhoods.

  7. What about the landlords’ costs every time the City decides to put forth ill-conceived legislation only to see the unintended consequences undermine the legislation in the first place? How about eliminating that practice?

    1. Translation – the obligation to fulfill one’s binding contractual obligations is only for the little people. Not for landlords.

      1. The landlords’ contractual obligations extend to their tenants. City legislation over-extends tenants’ rights beyond those stated in the contract. Landlords do not have the option to modify the contract on an annual basis to respond to the City’s legislation.

        1. All contractual obligations are based on legislation. What else would you have them be based on? God’s whispers to a clerk in KY?

          Everyone, be they landlord, tenant, or neither, must deal with changes from new legislation, which are supposed to help us form a more perfect union, n’est-ce pas?

          Sometimes new SF legislation benefits landlords, such as the recent law to permit short term rentals. That was a new right granted to property owners. They are not obligated to pass it on to their tenants. Was that an over-extension of landlord rights or an under-extension of tenants rights?

          1. Jake: Then allow both parties to change their lease annually if there is a mutual agreement. Why should leases which were entered into 5 or 10 years ago which could not have anticipated the kind of proposed restrictive legislation by Supervisor Kim (on this November ballot) be valid?

            As for short term rentals, I do not do them nor do I allow my tenants. So I don’t see it as benefiting all landlords.

          2. Furthermore, the issue of subletting has long been settled. Look at any standard lease document language. The duration of such subletting which (short-term or long-term) is only now in contention.

          3. What do you mean by “mutual agreement” and “change their lease”? Would that mean that each year both landlord and tenant would have to agree (“mutual agreement”) to change any terms of the lease other than those already limited by rent control, such as the maximum rent increase? Because I think we already have that or something similar. Or do you mean that a landlord could make a condition at the time of signing the lease that the tenant agree to annually “change their lease” to address entirely unknown future legislation “which could not have [been] anticipated”? Because that is nuts, unless it is just a way to make the lease annual. How would you even draft the parameters of what counts as changing a lease vs breaking a lease?

            If you had whatever this “change the lease” option is, how would you change a lease entered into 5 years ago to adapt to the legislation on the ballot this November, if it passes?

            As far as anticipating the future, well all business contracts have to do that. At least SF landlords have had their property values rise faster than inflation over every decade since rent control became law. Though they seem to whine all the way to the bank.

            As to ” the issue of subletting has long been settled”, um, no, the point I made is that SF recently granted new rights to property owners for less than 30 day rental. That was illegal before. Interesting how you so frequently complain when you feel the property rights of landlords are being “restricted”, but ignore when they are being expanded.

        2. …the dispute is over Sangiacomo’s EXISTING obligations under the Development Agreement that was negotiated between the City and Sangiacomo in exchange for his entitlement approvals. This not some post-hoc City legislation. He agreed to these terms and is now breaching the agreement. THAT’S what the dispute is about.

          Jesus Christ on a pogo stick.

  8. On Sunday, the Chron published a now-online profile of landlord-developer Angelo Sangiacomo — a nice story we can happily roll into the American mythos of self-made man. The plucky 85-year-old owns a small castle in Italy, swims laps instead of golfing, and is also known as “the father of rent control.” Asked why he didn’t just drop the Trinity property given the huge headache it was giving him years ago: “We never sell! That’s our business; you buy the son of a bitch and you hold on to it. Every time you don’t buy, you make a mistake.” [SFGate, previously]

  9. Born in 1924, Trinity’s founder Angelo Sangiacomo is the epitome of a self-made man. From his humble beginnings in San Francisco, he has built a major company from scratch. Now owning properties in more than 16 unique neighborhoods Trinity is one of the most well-known rental groups in SF. He took some time from his busy schedule to talk to us about his upbringing, on his company’s recent rebranding and what inspires him.

    Q: We know you’re SF born and bred, but tell us a little more about the neighborhood you grew up in.

    A: I was born and spent my formative years in the Richmond District. I absolutely loved it and I think it had a large influence on the work I started doing later on. Richmond is special. It’s a melting pot with a mix of different cultures all living in the same area. At the same time, it’s also quite residential and a lot of immigrant families would rent the houses they lived in. I think that was one of the first sparks that initiated all this for me—I wanted to be able to provide good homes for good people.

    Q: When did you start in real estate?

    A: It was shortly after WW2 when I decided I wanted to pursue a career in real estate as a salesman. We didn’t have Craigslist back then so I picked up a newspaper and looked at the real estate advertisements. I was lucky to find a one-off brokerage company out in the Avenues. I met with the owner and she brought me on board.

    Q: You were doing well as a salesman, so what made you want to move on?

    A: Well like you said, I was doing well. I’d succeeded at something I set out to do and so I wanted a new venture. I also wanted to build my own brand and create a company that held my ideals and showcased my innovative business practices.

    Q: Starting a business like this is a lot of work for anyone, what did you find helped you in those early stages?

    A: Hands down my family. I couldn’t have done it without them. My wife, Yvonne, provided counsel and held down the home front, taking care of our seven wonderful kids. My sister Rose, she was also monumental. She left her job at Liberty Mutual and joined the family business when I asked her for help. That’s one of the things I’m most proud of…to be able to call it a family business. It’s grown since then of course, but we started this as a family and because we felt a connection to the city and still do. I think we still have a family style philosophy at heart that we share with our tenants.

    Q: Branding varies depending on a company and their style. What does branding mean to you?

    A: Our brand is our company’s promise. It’s what we stand for and what we want our residents and The City to think of us. At the heart of it all is love. Our love for San Francisco, great architecture, amazing culture, diversity and each other. That is, the incredible family inside of Trinity. We wanted all of that to come through in our new branding and we believe we achieved that.

    Q: What advice would you have for a budding entrepreneur?

    A: I would say, be eager, be innovative and do not be afraid to rely on those around you for help. Your friends and family are a wonderful support system and if the tables were turned you’d help them out just the same.

  10. With the rent control, Angelo Sangiacomo still managed to become successful by owning many buildings with no rent control. The best thing for the city to do is to get rid of rent control and allow new buildings. Without rent control and with a lot of new buildings, Angelo Sangiacomo will become poorer due to reduced rent.

  11. Aggressive city attorney will cause a reduction of available rental housing. Poor tenants will have to pay for higher rent. Landlord’s legal expenses are business cost, tenants probably will need to pay increased rent today or tomorrow.

  12. I’m not surprised in the least. This company is the most crooked company I have ever encountered in my life. They knew what they were doing. Everyone that I’ve had contact with at their corporate offices lies through their teeth. They will try to cheat you by attempting to say that if you have an old lease they can change your terms. They will “forget” to give you required funds if you have to move out if they make repairs. If you take them to the Rent Board they will lie in front of the judge. They are far worse than Citi. And yes, I say all these things from personal experience.

  13. SF Quiz: Who will be remembered as the worst landlord? Sangiacomo or Frank Lembi (name link for details)?

    I dealt personally with both as a renter when I lived in SF, and my vote is Lembi.

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