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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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These smooth waters became choppy last fall, when "Carlos reported to us that he was going through some personal problems," Shaw continued. "Carlos' personal issues soon triggered concerns about his relationship with a couple of the hotel's tenants. An investigation was conducted, and for some time there was not sufficient evidence to conclude that Carlos should be terminated. When that evidence emerged in July 2007, Carlos was removed from his post and his employment ended."

Mendoza says the "personal problem" allegations, in which he was said to have had an affair with a tenant, are false, and that he resigned because he thought he was being unfairly accused.

Shaw's public spin on the Mission Hotel situation contrasts sharply with THC's own court filings requesting restraining orders against Mendoza.

Mendoza "continues to stalk and threaten employees. He continues to threaten and extort tenants," according to requests for restraining orders filed by a THC attorney. According to the filing, Mendoza was furious that some employees had ratted him out.

Fox, THC's lawyer, was scheduled to appear Sept. 5 in court to explain Mendoza's alleged criminal activities. I had hoped to see an illuminating description of life inside one of the city's largest poorhouses.

Not long before this hearing date, a copy of the filing appeared on a blog run by Jeff Webb, a resident of the THC-run Seneca Hotel. Webb's blog item was then picked up by two other San Francisco–based blogs. Fox subsequently asked the court to postpone the THC–Carlos Mendoza hearing until Sept. 21. Neither she nor Mendoza showed up for the second date. Mendoza says he was not served with notices to appear.

Whatever the truth of the allegations in the restraining order requests, sources allege that THC's reputed "Vice Hotel" was a well-oiled machine. Drug dealing was the most visible illicit activity, according to residents, former residents, and employees.

"I got myself into the money-loaning business," said a source who recently moved out of the Mission Hotel. "[Users would] buy drugs from [a dealer] and when they ran out, they'd borrow money from me. It got to the point where [the dealer] had something resembling a Glide Memorial Church bread line every third of the month. This ran all night. I asked, 'How in the hell are you getting away with this shit, and nobody's going to jail?' He tells me, 'You can conduct any business you like in here, as long as you pay rent.' I said, 'But I'm on General Assistance; they pay my rent.' He said, 'No, as long as you pay rent.'"

"Rent," this source said, meant payments to the hotel manager.

Another tenant I spoke to also said Mendoza would warn the aforementioned dealer of the police's presence. "Carlos would go to his door, give him a soda, and say, 'You've got to slow down the traffic tonight,'" said the tenant, who claims to buy drugs from this dealer.

Since Mendoza left, however, the dealer "has not slowed down his dealing. He's still selling crack. I bought some last week, and it made my chest hurt," said the tenant, adding that at least six other occupants currently deal crack from their rooms. "There's no secret. It's done on the stairway. You can see people coming in and out."

Not everyone in the hotel welcomes the drug trade. Combined with the prostitution that several residents said went on in bathrooms and elsewhere in the hotel, the trafficking created a menacing atmosphere.

Mendoza "put me right in the middle of what they call the drug corridor, and I don't do drugs, and I was afraid," one woman said. "I was coerced, intimidated; they called me a narc. It was a horrible situation."

Mendoza said he actually reduced drug dealing in the hotel, and that he did not receive kickbacks or any other sort of benefit from dealing.

It's not a shocking idea that someone in a position of authority over vulnerable people might be accused of abusing power. But it is peculiar that a city-funded charity with an $18 million annual budget might allow such a situation to persist.

In his "setting the record straight" column last week, Shaw noted that his agency runs criminal background checks on employees. He also suggested that anything I might write should be considered unfair because I've criticized him in the past, citing a 2005 column in which I referred to him as a "skid row kingpin."

In spending three weeks talking with former THC employees and with social service providers who work with the homeless, I'll grant Shaw this: I've come to doubt that he's a cynical person. He's widely admired for having organized San Francisco's downtown poor during the 1970s. And nobody I spoke to believes that Shaw approved of what was going at his hotel.

But Shaw's organization seems to be set up in such a way that these supposed problems are widely believed to have been allowed to fester for too long. Some of his former allies believe he may not be effectively managing what has grown into a large and complex organization.

The Care Not Cash program has helped grow THC from a 20-employee charity to a multipronged organization employing some 200 people. Meanwhile, a THC structure has evolved that may keep managers such as Mendoza from being held accountable.

THC runs in-house tenant "advocacy" organizations that tenants and workers with other nonprofits believe may actually prevent problems from coming to light. Of THC's total $18 million 2005 budget spent on the housing program, the agency spent $500,000 per year running city-funded tenant-advocacy groups such as the Central City SRO Collaborative, the Mission SRO Collaborative, and its Code Enforcement Program, in which SRO employees help tenants complain about building defects. As stand-alone advocates, these groups provide a valuable counterbalance to downtown slumlords with a reputation for cheating and even abusing tenants.

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Matt Smith

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