The historic Benjamin Franklin Hotel was sold this week, sparking hope among local merchants that new ownership of the prominent downtown property will help spark a revitalization of the area.
The vacant hotel at 44 E. Third Ave., built in 1926, was sold by UBS on Wednesday, spokeswoman Kelly Smith told The San Francisco Examiner. Smith could not confirm the buyer or the sale price.
The news was welcomed by nearby businesses. The chef and co-owner at Astaria restaurant in the hotel’s ground floor said the hotel has been vacant for at least seven years through a series of owners and half-completed renovations.
Alicia Petrakis said she hopes a new owner can come in and “treat this property with the kind of respect and vision it deserves.”
“If we had some revitalization to our downtown that could be spurred from an actual hotel development, it would be amazing,” she said.
Petrakis said the property went into a reverse auction in early March, with a starting price of $6 million, and she said she believes it sold for between $5.5 million and $5.7 million.
The hotel, built for $250,000, was once billed by owner A.C. Franklin as “a country resort for vacationing San Franciscans,” according to a historical city pamphlet.
United Airlines leased the hotel for two decades to house flight attendants and pilots who were passing through town, until it filed for bankruptcy in 2002.
More recently, the Lembi family — which formerly owned hundreds of apartments in San Francisco — bought the building in early 2007, but UBS took it over about two years later amid the group’s financial difficulties and has owned it ever since.
The Lembis began a renovation of the building, including upgrading the hotel’s 90 guest rooms and making exterior improvements, but they only finished some of the interior work and never got to the outside, Petrakis said.
She said the restaurant lost business and had to deal with flooding and scaffolding out front even when work wasn’t going on.
While she’s hopeful about the new ownership, “you are still sort of wary, just because once you’ve been burned once or twice, you’re ready for the flame to come again.”
Kim Okcu, who owns Tosuns Elite Tailoring behind the hotel, also said nearby merchants have suffered from the blight created by the vacant property. She said she hopes the new owner will help the area become “more clean and professional looking.”
“We’re so happy,” Okcu said.
The new owner will have to seek permission from the city for renovations, because the previous permits expired in February 2009, said City Planner Julia Yeh.