Developer plans to revive S.F.’s Grant Building

San Francisco’s historic Grant Building led Market Street’s post-earthquake change from a jumble of mostly wood-frame Victorians to office buildings. Now a developer wants to return the Grant to its original luster, joining other renovations in an area that has been blighted for decades.

The eight-story brick and terracotta landmark still shows hints of the Renaissance and Baroque detail that once boosted its commanding profile at the corner of Seventh and Market streets.

But the building’s ground floor storefront is now blanketed with red shingles and plywood, and its signature rooftop cornice and parapets are gone. The worn-out interior includes ancient plumbing and wiring, and its hollow-tile partition walls are not likely to withstand a major earthquake.

In addition to restoring the Grant’s exterior, developer Simon Johnson wants to gut the building and radically change its current use from offices to a youth hostel, boutique hotel, restaurant, lounge and rooftop garden.

City Planning Department documents show the estimated renovation price tag at $16 million, and Johnson said he would like to get going on the project as soon as possible, but the construction cost and the completion date are moving targets, he said.

The proposal also must be reviewed by the city’s Historic Preservation Commission, Planning Commission and Board of Supervisors before it is approved.

Johnson, 31, worked on a hostel project in Melbourne for an Australian company and bought the Grant for $9 million in 2008. He says the hostel choice makes economic sense, given the San Francisco office market downturn and the city’s healthy tourism trade.

"The hostel is a profitable business concept that is better known in Europe and Australia," said Johnson, who is undertaking the project without partners. "It will appeal to a higher-end backpacker."

But some observers question whether the corner needs more hospitality space when there are lower-end hotels next door and across the street. Others bemoan the loss of the building’s original offices, which in the past few decades have housed an interesting cast of small businesses, artists, writers and nonprofit organizations.

"I think it’s a very sad thing," said Randy Shaw, executive director of the Tenderloin Housing Clinic, which, among other things, provides legal assistance to low-income tenants. "We say we want to keep creative and cultural things in the city. Historically, the tenants in the Grant Building have been creative people."

Shaw helped lead a successful fight in 2000-01 to stop the Grant’s previous owners from imposing rent increases that would have put many tenants on the street. The highly publicized battle ended with tenants securing more modest increases that they could afford.

Shaw said he didn’t see a similar battle erupting this time. The building is only 35 percent full now, and instead of hiking rents, Johnson is simply letting tenants stay until their leases expire. The last lease is up in June 2012.

The Grant Building is named after Joseph D. Grant, a local financier and industrialist, who was president of the Columbia Steel Co. and director of the Bank of California. The building was completed in 1905, but its interior was ravaged by the fire that followed the 1906 earthquake.

A major renovation included reconstructing partitions, plaster, wood trim and other finishes and replacing windows. After the earthquake, the neighborhood developed into a popular entertainment district showcasing live theater and movie houses. By the 1950s, however, it began to decline.

The building now sits at the heart of the Mid-Market area, which despite being the subject of renewal efforts since the 1960s, features empty storefronts and hustlers.

On Thursday, San Francisco Mayor Gavin Newsom held a news conference to discuss several initiatives intended to revitalize the area, including tax incentives for historic rehabilitation and small-business loans.

Nearby, the domed landmark Hibernia Bank, which was erected in 1892, is undergoing repairs after it was purchased in October 2008 for $3.9 million.

One block west of the Grant Building, as many as three residential towers are planned for Trinity Plaza. A 24-story building is nearly done.

Still, it’s difficult to forecast when the tattered span of Market Street will turn around. The Grant sits three doors down from the Market Street Cinema, an aging porn movie theater, and the boarded-up Hollywood Billiards.

"I don’t know how long it will take for the area to come back," Johnson said. "I do know that it has great potential."