Hotels in Tenderloin sue SF over drugs, dirt and crime in “containment zone”

Two hotels and a restaurant/bar have sued San Francisco for creating a Tenderloin “containment zone” for open-air drug use, drug dealing, public defecation and violence.

Best Western Red Coach Inn, Phoenix Hotel and its Chambers Eat + Drink, plus five unnamed residents filed the federal lawsuit over the city’s de facto “containment zone” policy, the San Francisco Standard and San Francisco Business Times reported.

The complaint describes an environment of rampant street drug use and drug dealing, illegal sidewalk vending, public defecation, erratic behavior and threats as well as acts of violence.

The businesses and residents accuse the city of negligence, public and private nuisances and of violating the Americans with Disabilities Act, which requires sidewalks remain accessible to the public. The suit includes images of sidewalks blocked by tents and illegal street vending.

The Phoenix Hotel, operating since the 1980s at 601 Eddy Street, said it doesn’t plan to renew its lease when it expires in September 2025, according to the complaint.

“Renewing a lease is a long-term commitment that requires a reinvestment in the property and a good-faith belief that customers will patronize the business in the future,” the lawsuit states. “The current conditions around the hotel have caused the Phoenix Hotel plaintiffs to decline to renew the lease.”

Between 2011 and 2019, the hotel employed 50 people and business was “vibrant,” according to the complaint. Then conditions around the hotel “worsened considerably,” and the hotel cut its staff to 20. 

It now has trouble hiring workers because “the neighborhood conditions deter applicants.” When a hotel employee asked a trespasser to leave the parking lot, the man “struck the employee on the head with an object,” according to the lawsuit.

At the Best Western at 700 Eddy Street, hotel staff “regularly clean and hose down the sidewalks abutting the hotel, but they are quickly re-littered with excrement, used syringes and garbage,” according to the complaint.

“The city would not tolerate such arrogant and reckless conduct in other neighborhoods,” the lawsuit says. “But because the city has decided to treat the Tenderloin as a containment zone, it does nothing to discourage such activity despite the harm it causes to Tenderloin residents and stakeholders.”

The plaintiffs seek injunctive relief, and no damages. They are represented by Walkup Melodia Kelly & Schoenberger, a personal injury firm based in San Francisco, which is working the case pro bono.

The City Attorney’s Office will review the complaint and respond in court, spokeswoman Jen Kwart said in a statement.

“While we understand and share the frustration of Tenderloin businesses and residents, the city is making progress in reducing crime, disrupting open-air drug markets, and addressing homelessness, all while complying with the preliminary injunction issued in the Coalition on Homelessness case,” Kwart said.

Kwart is referring to a legal battle over what extent the city can enforce its anti-camping laws.

UC Law SF also files a court motion in an ongoing U.S. District Court lawsuit seeking compliance with a 2020 court order requiring the city to remove all Tenderloin homeless encampments and tents, according to the Standard.

The city has claimed it’s prevented from enforcing that order by a 2022 injunction from Judge Donna Ryu barring enforcement of anti-camping laws when there are more homeless people than available shelter beds.

The office of City Attorney David Chiu also called the hotels’ lawsuit timing “odd” because of an upcoming U.S. Supreme Court decision that may “alter the legal landscape in homelessness cases.” 

That decision, in the case of Grants Pass v. Johnson, is expected this summer and could set precedent on whether local governments can make it a crime to involuntarily live on the streets when adequate shelter is not available.

— Dana Bartholomew

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