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The Vice Hotel 

One of the largest city-funded Care Not Cash hotels was allegedly run as a home for extortion, drug dealing, and other vices

Wednesday, Oct 10 2007
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The biceps of 53-year-old ex-boxing coach Emmett Marcel Oliver bulge to the size of cantaloupes as he demonstrates his punching technique against a locked fire escape door he says should be open. Bam!

Oliver says he's a former drug dealer, that he counts among his friends dangerous gang members, and that he's lost people close to him to violence. He frets out loud about how he doesn't want to be in that world. Oliver tells me he's a veteran prison inmate, and his day-to-day life is often interrupted by incidents that cause him to fear that he may go back in.

Oliver, usually a warm, charismatic man, is angry. And he's raging at the building. "Look at this," he says, holding up a garbage can lid to reveal black scum underneath. "It hasn't been cleaned up in years."

He then points out a window to show me how the foundation of the building next door is crumbling: "That gives the mice a place to go," he says.

Oliver speaks for many people who are disturbed by this building. Some of the complaints are more serious than garbage pail scum.

The place where these people live and struggle to stay clean is the drugs-and-violence-infested 248-room Mission Hotel at 520 South Van Ness. It is the largest of 15 city-taxpayer-subsidized "single-room-occupancy" hotels leased and managed by the Tenderloin Housing Clinic (THC), a nonprofit organization dedicated to providing services to the indigent.

It's also one of the largest of the city-funded hotels that became the vehicles for Care Not Cash, the signature antihomelessness program that helped propel Mayor Gavin Newsom to office in 2003.

Until recently, the hotel was run by a clinic employee as a haven for criminal activities, according to tenants, THC workers, and city employees familiar with the situation.

During the three years the hotel was operated by THC employee Carlos Enrique Mendoza Hernandez, it was allegedly home base for systematic, management-run rackets that may as well have been specifically designed to suck people like Oliver back into a life of drugs, violence, menace, and despair.

According to allegations from Tenderloin Housing Clinic employees, city employees and leaders of charities that aid San Francisco's poor, the neatly coiffed, 6-foot-tall, 330-pound Mendoza turned the building into an enterprise for his own profit.

During an hour-long conversation in a bar, Mendoza strenuously denied these allegations. We had agreed to meet at The Connection on Mission Street last week. There, a man met me at the door and told me the meeting place had been changed because, Mendoza said, police had been spotted in the area and he didn't want any "drama." During our eventual conversation at The Annex on Mission, Mendoza said he was an exemplary employee during his five years working first as a desk clerk and later as a manager of the Mission Hotel. He said he was one of THC director Randy Shaw's favored employees, and that Shaw had directly intervened to have Mendoza promoted.

THC attorneys, however, alleged in August court filings that Mendoza is a gang member — which he denies — and that he conducted an ongoing campaign of criminal activity at the hotel. In these filings, THC attorney Raquel Fox requested restraining orders to protect 17 employees against alleged threats of violence from Mendoza.

Yet Mendoza says the agency did not serve him with court papers or otherwise contact him about these allegations. His sister, Gloria Hernandez, claims to still work for THC. She says she learned of the requests for restraining orders on a San Francisco blog that reported on the filings. "My brother didn't do what they said he did," she said. "It bothers me that they can insinuate stuff about him when they didn't have true facts."

However, THC officials aren't the only ones describing criminal activity at the Mission Hotel. Nor are they alone in alleging that Mendoza may have been involved in it.

In addition to THC's own court filings, current and former Mission Hotel tenants and THC employees who worked alongside Mendoza indicate the hotel may have been a base for extortion. People familiar with the situation say activities in the building also included loan sharking, extracting payments from drug dealers in exchange for protection from police, and skimming city-subsidized rent money.

Mendoza denies all the allegations, and says the sort of skimming he's accused of — which involves reporting rooms as vacant, then renting them out off the books — would not have been possible without his superiors' consent. "There's no way I could have done that. Whenever a tenant moves out, they have to let the housing department know," Mendoza says, referring to the THC division that oversees the management of city-subsidized hotels for the poor.

As of last week, Mendoza's name did not appear on San Francisco Police Department arrest logs at the Hall of Justice. A police spokesperson did not respond to requests for an update as to whether an incident report exists about Mendoza's alleged activities at the Mission Hotel. I have not received a response to requests for an interview with THC's Randy Shaw.

When I attempted to ask questions of the city department that should oversee where the money is going, I was simply told to speak to Shaw.

Taken together, the accusations point to the possibility that San Francisco taxpayers have been subsidizing the management of what amounted to a vice hotel.

Mendoza "is dangerous and a reputed gang member of the Norteños," and "employees and tenants at Mission Hotel are fearful of violence," according to Aug. 23 court filings in which a THC attorney requested restraining orders against Mendoza to protect 17 housing clinic employees. "THC discovered defendant had been involved in criminal activity, including extortion, assaults, and threats of violence toward THC's employees and Mission Hotel tenants. The conduct is ongoing," staff attorney Fox wrote in the filings.

I was told during interviews with former THC employees, hotel residents, and social service providers who placed tenants in the hotel that Mendoza might have personally rented rooms off the books. When THC workers took over the hotel from Mendoza this summer, these sources say, they discovered tenants living in rooms that had been listed as vacant.

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Matt Smith

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