New Ruling Offers Brighter Future For Oakland’s California Hotel

By Kristin McFarland
Thursday November 20, 2008 - 09:58:00 AM

A new court ruling granting further independence to the California Hotel has given its residents hope for a bright future. 

On Oct. 29, Alameda County Superior Court judge Richard Keller upheld an injunction in place since late July. The restraining order prevents building owner Oakland Community Housing Inc. (OCHI) from shutting off the hotel’s utilities and evicting the tenants. 

In an even greater victory for tenants, Judge Keller granted many new powers to court-appointed trustee Anne Omura, executive director of the Eviction Defense Center in Oakland. Omura, named trustee in September, has been collecting the tenants’ rent to pay the utility bills and keep the hotel running.  

Omura now has the power to hire a management company that will provide security, repairs and a business plan for the hotel. Additionally, Omura will be able to rent out all 150 rooms in the hotel once they are up to code, creating the potential for the hotel to generate enough money to stand on its own. 

“I’m going to do everything in my power to help the tenants out,” Omura said. 

As a first step toward improving the hotel, Omura has used the money left over from paying the utility bills to hire the Jay-Phares Corporation (JPC), an Oakland-based property management and consulting firm, to run and rehabilitate the hotel. 

“This is a good victory for the tenants because they’ve been running the place themselves,” said John Murcko, attorney for the hotel’s residents. Since July, the residents of the hotel have been working security shifts, cleaning the hotel and self-organizing to keep their home intact. The management company will relieve the tenants of those responsibilities. 

“Our business is to create safe, habitable properties,” said John Jay, executive vice president and chief operating officer of JPC. The company specializes in the “rehabilitation and redevelopment of core urban properties, typically in communities with high percentages of minority populations, and often with significant social problems.” 

JPC’s first action was the implementation of professional nighttime security, provided by an affiliate company of JPC. 

“Currently, the building has not been secured, and as a result, there has been a lot of illicit activity,” Jay said. “We’ve quieted it down now and there have been no further incidents.” 

Jay, Omura and Murcko all stress that 24-hour security is an imperative need for the hotel’s future, both to keep the residents safe and to keep the neighborhood’s troubles on the streets and out of the hotel. For now, however, the hotel can only afford nighttime security, which is an improvement, but not the optimal situation. 

JPC has also brought in contractors, plumbers and a property manager to ensure that the building is safe for the existing residents. Jay said the company will work to make the occupied rooms pest-free and in good repair before improving the rest of the hotel. 

“Our first priority is the existing tenants, getting them in clean, safe apartments,” Omura said.  

In the future, the release of the unrented apartments, many empty and unprofitable since 2007, could allow the hotel to generate enough money from rent to support itself independently. But the unoccupied rooms must meet safety codes before they can be leased out, and the occupied rooms must receive the first attention. 

Funds remain a prime concern for the maintenance of the hotel and could prohibit the recovery of the empty rooms. Estimates have been made for the repair of broken windows, plumbing, elevators and sprinklers. The ‘wishlist’ of improvements also includes 24-hour security, repairs to all of the rooms and improvement of the retail spaces on the building’s ground floor. 

“There’s been a lot of skepticism that it can be turned around, but we’re going to give it our best shot,” Jay said. 

To ensure that the building is receiving sufficient funds, JPC will conduct a ‘census’ of existing tenants to make sure that all are eligible for low-income housing, have signed a lease and are paying their rent. 

Additionally, JPC hopes to lease retail space on the ground floor of the hotel to independent, women- or minority-owned, and non-profit businesses to generate further income. The company is willing to support low-capital ventures run by dedicated people who are willing to work hard, Jay said. 

“Make it up, believe in it, do it,” Jay said. “That’s what life is all about.” 

In that spirit, the advocates of the hotel continue working to keep it alive. 

Jay points to the original building of Merritt College in Oakland, a building in “far worse shape” than the California Hotel and managed by JPC during its transitional stage, as an example of potential rejuvenation. The Merritt College building now houses the north campus of the Children’s Hospital and Research Center of Oakland and the North Oakland Senior Center. 

“Predecessors say it’s impossible, but I don’t believe it,” Jay said. “If we are frugal and patient, we can generate enough income to rehabilitate [the hotel] and rejuvenate it and sustain it as low-income housing.” 

For John Murcko, the primary goal for the hotel is to keep it operating for the 12 years that remain of the 30 agreed upon when grants were given to make the hotel into low-income housing. 

“Right now, we want to ensure that the people who are there can stay for another 12 years,” Murcko said. 

“The hotel needs to be supported because it’s the right thing to do and it’s the legally required thing to do,” Jay said. 

The next hearing on the California Hotel will be held in the Alameda Superior Courthouse in Hayward on Monday, Jan. 12.