San Francisco to lose its status as Northern California's jewelry center: Jewelers cleared out of Phelan Building after 100 years
Built in 1908 with jewelers in mind, the Phelan Building has been home to Northern California’s jewelry industry for over a century. However, since Thor Equities' 2008 purchase of the building at the corner of Market, Grant and O’Farrell streets, jewelers have been systematically cleared out floor-by-floor to make way for new tenants. Rather than collecting rent from hundreds of tenants, Thor has shown a preference for larger corporations, which can occupy an entire floor. The building’s classic marble and oak halls with small offices have been conducive to individual goldsmiths and jewelry businesses. But this is about to end as Thor reconfigures the building to create large, open spaces preferred by modern hi-tech companies like Appirio, Voxer and the giant Sears Holdings, which now call the building home.
James D. Phelan, the former Mayor and Senator, constructed the building that bears his name immediately after the 1906 earthquake to further his vision to develop San Francisco’s culture. A passionate supporter of the arts, Phelan welcomed jewelers to his landmark building and bequeathed a cash prize for California artists that is still awarded. But now the Phelan Building is closing its doors to the artists whose creativity James Phelan thought was so crucial to the life and development of his beloved city.
Thor Equities, LLC, is a real estate development and investment firm founded by Joseph Sitt, based in New York City that specializes in revitalizing and adding value to urban properties in high-density areas. The company owns the historic Palmer House Hilton in Chicago and much of the oceanfront of Coney Island. It also owns property in New York City, Washington D.C., Philadelphia, Puerto Rico, Mexico, Boston, Atlanta, Baltimore, Norfolk VA, Miami, Chicago, Cincinnati, Boston, Detroit, San Francisco, Orlando, and Los Angeles. – From Wikipedia
No one begrudges Thor Equities its right to conduct business. However, what appear to be merely lines crossed off a spreadsheet in an attempt to bolster the bottom line, is in fact, not that simple. The Phelan Building is not just another asset, whose tenants are interchangeable. It was designed to be the home to a vibrant artisan community whose handwork and skill have been passed on by master to apprentice and is the result of years of patient practice. There are dozens of small businesses in the Phelan Building, run by expert artisans from around the world. They have thrived in the classic building and served generations of San Francisco residents. The well being of their businesses, their employees and their families, as well as their ability to serve customers effectively at the busiest time of the year, are now uncertain. They are being evicted not for cause, but to make the building attractive for large businesses, the same businesses City Hall likes to woo with tax breaks and special deals.
The irony is that the artisans and entrepreneurs being evicted pay their full share of rent to the landlord and their full share of licenses, fees, permits, and taxes to San Francisco.
It is a sign of the times: Old world vs. new. Low-tech vs. high. Mealtime vs. drive through, handwork vs. computer work, real vs. virtual. These craftsmen and craftswomen take great pride in their work. “Most of us do things the old fashioned way…by hand,” says Alan Revere, Director of the Revere Academy of Jewelry Arts, which is being forced out after 33 years. But it is not the economy that is leaving them behind. All of those evicted have succeeded through the recession. And all of these jewelers and suppliers would like to continue to do what they know and love. And so would their customers. Unfortunately for many, this will not be possible.
|charming halls lined in marble...|
Thor Equities Takes Over
The first thing Thor Equities did when it bought the classic downtown building was to charge tenants to receive their monthly rent bills, $5 by mail and $2 by email. When one tenant, Tereza Iñiguez of Shapes Studio mistakenly wrote her check for a penny too little, Thor aggressively hounded her with late rent notices hand delivered by security and certified mail to both her home and business until they received their payment, a check for one cent, delivered to Thor’s New York office!
Longtime loyal building employees were fired, janitorial services were trimmed, and tenants were repeatedly interrupted without warning by construction, noise, electricity, and gas shutoffs, while trying to conduct business as usual. On the service elevator, a new sign appeared, “This elevator is for freight access ONLY – Your cooperation is expected.” A feeling of hostility and tension quickly developed between management and tenants. When leases came up for renewal, Thor required tenants to sign a termination clause. This allowed the New York corporation to terminate leases without cause and on short notice, some as little as 60 days. Next Thor began clearing floors, forcing tenants to move within the building at their own expense, and then eventually kicking them out, while assuring jewelers that they would remain safe on the ninth floor.
|Stark Cubicles none of the charm remains...|
Five Centuries of Rent
Despite the fact that years remain on many of the leases, Thor has demanded that its tenants leave. Those being evicted now, have paid well over five centuries of rent to the Phelan Building. In all, over one hundred small jewelry-related businesses will have been thrown out by March 1, 2013. Many of the evicted have been in the building for decades and some for generations. For most, there is little prospect of relocating and maintaining their businesses downtown, if at all.
Looking for New Space Now
San Francisco is experiencing a run-up in commercial rents right now, placing it at the top of the nation. For jewelers, many of whom require both water and gas, the prospects of remaining nearby are slim to none. And yet this group of individual business owners would like to move together into a suitable downtown location, which is safe and compatible with the needs of jewelers.
Happy Holidays - for All but Jewelers
Thor is clearing jewelers out at the most sensitive time of the year for them. This is when the Phelan Building’s tenants are busiest making jewelry, filling orders, setting diamonds and creating gifts for their customers. Many received their notice to leave on the day before Thanksgiving! They will spend their holiday season consumed with survival, not cheer. With the cost of San Francisco commercial space leading the U.S., finding a new location at this time of year is downright depressing and draining to the business owner. Instead of making treasures and gifts for others, the Phelan Building’s jewelers are just trying to cope and figure out where they will be in two months and how much it will cost them to stay in business.
James Phelan, Patron of the Arts
Businessman, political leader, patron of the arts, and philanthropist, James Duval Phelan was born in San Francisco on April 20, 1861. As one of San Francisco's most prominent citizens, Phelan was honored on many occasions. He served as president of the Adornment Association and president of the Art Association."
-Excerpted from the Online Archive of California
In an open letter to the community, Mayor Phelan wrote,
“Apart from the consideration of utility, there is much to be done to make San Francisco an ideal city. There are citizens, utilitarian in their lives as well as in their aspirations, and this class must be educated to an appreciation of the beautiful, before they will give their vote and support to any movement whose end is beauty.
Then would follow museums, galleries of art, and theaters until San Francisco, by reason of its remarkable meteorological advantages, would assume the position of the most beautiful city in America, and its population the most artistic and pleasure loving, drawing to its realm myriads of strangers from year-to-year.
The influence of beauty would not be lost on the rising generation; and whereas we might at first have to import talent, thereafter our native population will be educated to such a degree of perfection, by reason of its environment, that artists and musicians, and men and women of taste would be a distinguishing part of this now cosmopolitan, but then American community.”
- San Francisco newsletter, Christmas number, 1897
The James D. Phelan Art Awards, bequeathed by the former Mayor of San Francisco and California Senator, recognize the achievements of California-born artists in a variety of disciplines and is part of the Art Awards Program of The San Francisco Foundation.
|The Phelan Building at night. ©Tribute Photography|
So Much for San Francisco Culture, History, Art and Architecture
Thor is literally tearing out the guts of this architectural gem, including removing the marble walls with oak trim and other architectural features, as each floor is cleared. Despite filling its floors for one hundred years, the jewelry community has been driven out. This cultural treasure cannot be saved. The Phelan Building artisans that have serviced countless customers, jewelry stores and small manufacturers in Northern California are dispersing and disappearing.
Made in San Francisco – No More
The jewelers in the Phelan building include goldsmiths, engravers, gem merchants, stone setters, repair shops, custom order businesses, and tool suppliers. These are artisans, both craftsmen and craftswomen, who use their hands to create. They already struggle against cheap foreign-made products and services. With the business climate in San Francisco leaning so far toward big companies, it is strangling the small entrepreneur. And now that many have to uproot their businesses, it is clear that a lot less will be made in San Francisco. A legacy of fine local craftsmanship is coming to an end.
Among the Departing
Revere Academy of Jewelry Arts, founded in 1979 by Master Goldsmith Alan Revere, has trained over 10,000 jewelers and jewelry hobbyists from around the globe. Many consider it to be the preeminent professional jewelry school in the US. Revere has thrived on the ninth floor and has a long list of successful graduates. He has helped dozens of the school’s former students to become tenants in the Phelan Building as their skills developed. But now things look very different.
“We watched as Thor slowly renovated floors one-by-one,” says Revere. “And we were consistently told our floor was safe. A few weeks before we received our termination notice,” he continues, ”The building manager told a room full of us that the ninth floor was reserved for small tenants and would remain the home to jewelers.” Obviously someone was misled. “Despite the fact that years remain on our lease,” Revere continues, “we have been evicted.” The prospect of relocating his unique 2000 square foot school is overwhelming. Having looked extensively in the City, Revere has come to the stark realization that his California State approved technical school needs to adapt, leave San Francisco or cease to exist, despite demand.
We Love Our Work
John Donivan and his wife Jo-Ann Maggiora Donivan (email@example.com
) have worked together in their ninth floor jewelry studio for three decades. Both are highly skilled master jewelers who specialize in gold and platinum work for stores and private customers. They too are devastated by the idea of moving all of their equipment and tools, as well as the tragedy of having to leave the jewelry community they have worked with for decades. “I've been in this space for 30 years and I thought I would die here,” said John. “I don't want to move for many reasons, one being the packing and physically hauling all of this equipment to an as-yet undetermined place. But the important thing is the big picture. All these artisans and their shops will scatter to the wind. There just will no longer be a center for jewelry in San Francisco.” A sign recently posted on their door says, “We will stay in business!! We love our clients and our work!!!”
Shapes Studio Moves Out
Tereza Iñiguez (firstname.lastname@example.org
) was forced to move her 30-year-old business, Shapes Studios Hair Salon to Sutter Street four months ago. Tereza says that as soon as Thor took over, a hostile, anti-tenant management was put in place. Her business had to shut down numerous times without warning because of plumbing, electrical and construction work being done in the building with no notice.
When Tereza’s lease came up for renewal in 2010, she says, “Thor announced that rent would be due on 1133 square feet rather than 831 square feet as in the past, because they said it had been miscalculated for 10 years. I had to pay for 36% more square feet without gaining any space in my suite. I was strong-armed into a one-way lease favoring Thor Equities. I was forced to sign a clause, which gave Thor the ability to terminate my lease at any time, with short notice. My choices were to sign a bad lease, leave in 30 days, or stay on month-to-month at triple the rent, not much of a choice,” says Tereza. At the time, management reassured her she would not be affected by changes in the building so she went ahead and renewed. But halfway through her lease, she was kicked out with a limited time to search, relocate and move her thriving business. “It was a nightmare. It’s one thing, if you are starting or expanding a business and you planned for the expense. But this was a big shock.” She searched and found a new location but since it would not be ready in time, Tereza requested a 4-day extension. Thor refused. “I had to move my business into storage until the new space was built out. It cost me in so many ways.”
“Thor Equities works diligently not just for its financial gain, but to mow down anyone in its way,” says Tereza, now that she is clear of the Phelan Building and feels free to speak honestly. “Thor knows it can push around small businesses, which are usually just hard working individuals or families trying to survive.”
Master Craftsmen and Craftswomen Leave San Francisco
Nancy Wintrup is one of 125 jewelers in the US to achieve the status of Certified Master Bench Jeweler® by Jewelers of America, the largest jewelry trade organization in the country. Only a handful of women have achieved this level. Nancy has spent over 40 years working, “at the bench.” Formerly a member of the International Jewelers Union, where she met Alan Revere in 1975, Nancy operates her own studio and teaches at the Revere Academy, down the hall on the ninth floor.
Like the others, she will be leaving her Phelan Building office soon. “It is so sad to see the destruction of our small business community in the Phelan Building,” she says. “Thor Equities has shown itself to be a very difficult landlord. After 32 years as a tenant I will be closing my San Francisco studio.”
From a Jeweler/Tenant
Many of the Phelan Building’s tenants are reluctant to receive publicity or draw attention because of the nature of their businesses. Here are two tenants’ experiences with Thor:
After studying at the Revere Academy, I decided to get my own space in the Phelan Building so I could be near other jewelers. For several years I shared a studio and then I signed a lease for a small space on my own. I moved in, set up shop, hung cabinets, had my phone and DSL installed, the whole works. But when I returned from a weeklong business trip, I received an eviction notice. I literally had not been there for even a month when I was uprooted.
I was given until the end of August last year to move out. Luckily a suite on the ninth floor opened up. I was assured jewelers would remain there so I signed another lease. Thor agreed to install water and gas, paint and put in a new floor. But it took 6 weeks to get done. Finally in mid August, as I started to move my things up to 9, I was told I needed to wait because Thor found asbestos in my wall. So I had half my tools and equipment on one floor and half on another, while trying to do business. That’s when Thor said the asbestos removal would take several weeks longer to complete. Meanwhile I was told I had to get everything out of the old suite before end of August. So with no place to put my things, I moved it all temporarily to an empty space on another floor. The asbestos work dragged on for weeks and eventually my studio was ready to occupy. I had not been able to work efficiently all summer at this point. And now, after just one year of occupancy I have received an eviction notice.
- Anonymous tenant
From a Gem Dealer in the Phelan Building
I am a proud gem wholesaler who has been based in The Phelan Building for over half my life. This has become my second home, surrounded by many good business colleagues as neighbors. In April, I received notice from management to vacate our suite after 33 years. This came as a shock to me. Nevertheless, I was still grateful for being able to relocate to the ninth floor with fellow colleagues in my industry. But after working out of the new suite for a mere three and a half months, I just received another termination notice last week to vacate our space yet again. Not only did we just finish relocating and organizing all of our heavy equipment, but we have incurred huge moving expenses already, with much more ahead, all of which comes out of our hard-earned income.
I understand that the landlord is not breaking the law by evicting us. However, I feel that we have been wronged by an unethical standard. A clearer warning should have been set in place if there was even a question that we were going to be sent packing again. I received eviction notice on November 20th, and now have to vacate our space in 60 days. For those of us in the jewelry business, the holiday season is the most critical time of the year for our earnings, with as much as half of our business coming in October to December.
Judging from my personal situation, this might just be an unfortunate circumstance. But in the grand scheme of things, what the landlord is doing is crushing the jewelry industry of San Francisco. When they vacated the entire 3rd and 5th floors for tenants who were able to muscle their way in by leasing entire floors, some jewelers were able to relocate, but others were forced to shut down their businesses as a result.
Now they are vacating the entire ninth floor, which is home to several key players in the industry such as Revere Academy, our tool supplier, lapidary shop, setters and many others. These are little businesses that many retail jewelers in the region rely upon. This small community, based in The Phelan Building, has been the cornerstone of the San Francisco jewelry industry for over 100 years. It is a shame to see this tight-knit community of tenants vanish over a seemingly casual business decision made in an office three thousand miles away, one that brings extremely harsh consequences for my colleagues and me. If this note does nothing more than to add to the list of complaints from other unhappy tenants, please know this: those of us who are being evicted from The Phelan Building do not take this lightly. We are not only being forced to leave at the most critical and inconvenient of times, but we are also being stripped of our pride and dignity, which have defined who we are as San Francisco small business owners for the last three decades.
- Gem merchant in the Phelan Building
Industry Reaction from San Francisco
As proprietor of a fine jewelry gallery near Union Square, I have relied on the jewelers of the Phelan Building since opening my doors seven years ago. The artisans of the Phelan Building have been a key resource and foundation for my success. We have used many of the building's fine craftsmen; goldsmiths, engravers, repair shops, diamond and gem setters, etc. In addition we now represent many graduates of the Revere Academy of Jewelry Arts, which is one of the anchors and treasures of the jewelry community. When I heard that the owner was clearing the building of successful small businesses that pay their rent, I just shook my head. What has become of us?
- Peter Walsh, owner
11 Maiden Lane
San Francisco, CA 94108
Reaction from an Oakland Jeweler
For 30 years I have been coming to 760 Market Street for business. Like many in the region, I rely on the high quality goods and services of the building’s jewelry professionals. It is incomprehensible that the property owner would show such disregard for it's long term tenants, their businesses, their families and customers. It's a sad day when corporate profit is more important than small businesses.
- Bill DeGroot, owner
Janko Jewelers, Oakland
From a Jeweler in Oregon
I have taken many classes at Revere and wish to continue to do so. Coming to Revere Academy is an experience every jeweler remembers for life. Being internationally known within the jewelry community, Revere is a destination experience for all those who take their craft seriously. The opportunity to work and learn alongside nationally known jewelers gave me the tools to be successful. I am deeply saddened at the prospect of closing the Revere Academy. Nowhere in the United States can one find the blend of old world techniques and cutting edge skills, taught by jewelers who are true artists practicing their craft.
Reaction from Dartmouth College in New Hampshire
The Revere Academy of Jewelry Arts is a preeminent American jewelry trade school. The Academy’s influence on the field of jewelry making cannot be overstated. The school has trained countless jewelers and designers. Many businesses and careers owe at least part of their success to time spent at the Revere Academy. On a personal level, I’ve had the privilege to both take classes and teach at the Academy. The school was a pivotal component in my education. I can’t imagine contemporary goldsmiths not having the Revere Academy of Jewelry Arts as a resource in the future. It's that important!
- Jeff Georgantes
Hanover, NH 03755
Reaction from a Goldsmith in Scottsdale, Arizona
The Revere Academy is far more than just a school and a place where students can learn about jewelry. Revere has created a vibrant community that stretches all the way around the world. The school has touched the lives of thousands of people in a profound and wonderful way. I am thankful to be one of those people. It has been 26 years since I first came to Revere and 8 years that I have been teaching at the Academy. It has been a significant part of my life.
- Michael David Sturlin
Phelan Building Survival Group on Facebook
A group of customers, students and tenants have mounted a Facebook page for those involved in the mass displacement.
More from Wiki
Thor Equities is a full service real estate development and investment company whose capabilities include acquisitions, financial management, development, property management, and leasing. Thor specializes in value-added investments in shopping centers, malls and mixed-use urban projects. Today, Thor’s current portfolio of properties totals 12,000,000 square feet (1,100,000 m2) and is valued at more than $3 billion. Thor manages several property funds whose investors include pension funds, investment banks, college endowments, and foundations.
Quote from Bizjournal.com
: "The Phelan Building, built in 1908, sits on a triangular-shaped corner between Market and O’Farrell streets. New York-based Thor Equities bought the building close to four years ago, renovated it and targeted technology tenants to fill it. “I believed San Francisco would get stronger as technology companies got stronger,” said Joe Sitt
, chairman and CEO of Thor. “It played out as we expected it to play out.”… Sitt said Voxer is paying more than $50 per square foot for its space, about double what the landlord was asking a year ago."
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