Fairmont owners making last effort to keep hotel

SAN FRANCISCO (KGO) -- Some of San Francisco's most venerable hotels are struggling. They sit atop Nob Hill, far above and away from the convention action south of Market.

The Fairmont is making a last ditch effort to stay alive. It is one of the most famous hotels in the city, but fame doesn't necessarily equal fortune. The owners of the century-old hotel are threatening to sell unless the city allows them to demolish a 23-story tower and transform it into condominiums as part of a $130 million renovation project.

One of the owners told ABC7 they spent $4 million over the last two years trying to push the project, which has still not gained city approval.

"The revenues that we will generate from the sales of the residences will provide us with the capitol to reinvest in the historic building," owner Bill Oberndorf told ABC7.

However, a city policy allowing some hotel rooms to convert to condos expired last fall, seemingly dooming the project. Now, the owners are pressuring the district supervisor, David Chiu, to help carve out a special exception for them.

He seems skeptical.

"There has been a lot of controversy over this project. There are a lot of neighbors who don't think this is particularly appropriate. There are likely hundreds of hotel workers that would be out of a job," he said.

The Fairmont owners say more jobs will be created if their project can get the go-ahead. The environmental impact report came before the city's planning commission back in October and stalled on a tie vote just as the conversion policy expired.

"I think everyone wins if we're able to work out something that satisfies the concerns of the neighbors, of labor, of the hotel," Planning Commissioner Mike Antonnini said.

These are challenging times for other Nob Hill hotels as well. The Mark Hopkins and Huntington Court are up for sale, and the owners of the Fairmont say that could be their fate as well.

"After going through this exercise, if we aren't able to do this, we'll most likely put the hotel up for sale," Oberndorf said.

However, their latest strategy targeting supervisor David Chiu with glossy fliers aimed at his voters may not work.

"I respond to facts and figures, not political propaganda," he said.

The owners say they need to find someone to introduce legislation by next Tuesday if they are going to be able to get the ball rolling again.

When talking about the Fairmont Hotel, people often ask, "What about the Tonga Bar?" the Polynesian tiki bar. ABC7 understands that no matter what happens to the Fairmont, it will be sold to another hotel and kept intact.

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san francisco county, nob hill, tourism, economy, san francisco news, carolyn tyler

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