City owed $18 million for Fillmore Heritage Center

The showplace club and restaurant that once housed Yoshi's now sits empty.

The showplace club and restaurant that once housed Yoshi’s now sits empty.

IT HAS NOW cost more than $18 million in city funds to build the Fillmore Heritage Center and keep it afloat.

There is no new tenant in sight for the huge empty spaces formerly occupied by Yoshi’s jazz club and restaurant. The garage is losing $10,000 a month now that the building has few visitors. The Lush Life gallery also sits empty and has no potential new tenants. The restaurant 1300 on Fillmore continues to operate, but its future is in doubt.

These are some of the details that have finally begun to emerge about exactly what is happening with the project opened in 2007 to revitalize the stretch of Fillmore Street south of Geary once known as the Harlem of the West. Public hearings on July 13 and July 27 brought out scores of restive neighbors, and a thick “informational memorandum” laid out the sad financial facts, complete with spreadsheets, term sheets, notices of default and lease terminations attached.

“What the answer is, I don’t know,” said Board of Supervisors President London Breed, who represents the area and presided over the public meetings. “Nothing is finalized. It’s in the hands of the city.”

Breed shot down rumors the space might be converted into a Whole Foods grocery, insisting it would be reborn as an arts-related operation.

The city took over the 50,000-square-foot ground floor commercial spaces on June 5 from developer Michael Johnson, who spearheaded the project. Johnson had taken over the club and restaurant on July 1, 2014, after Yoshi’s San Francisco declared bankruptcy. He rebranded it The Addition on November 1, the same time he stopped making his loan payments to the city. He shut down the club on January 14 of this year.

Since then, it has sat empty. Johnson now owes the city $18.054 million, documents show.

Johnson distributed a “fact sheet” at the July 27 meeting that said he “has secured three potential new tenants,” but been unable to negotiate a deal with the city.

“No new tenant has been selected,” said Joaquin Torres of the mayor’s office at the July 27 meeting. He said the city was developing a request for proposals and would hold another public meeting in September to present its plan.

Many local residents called for the city to give the building to the neighborhood as redress for historic racial injustices. But Breed said that is unlikely and that the commercial space and garage will be sold for fair market value.

“The next establishment here needs to be a financially viable project,” she said.

UPDATE: Near the end of the July 27 meeting, developer Michael Johnson took the microphone to offer his view of the events that led from the creation of the Fillmore Heritage Center to the eventual closing of Yoshi’s — and then to the spectacularly quick demise of The Addition.

Johnson noted that he was primarily a housing developer when he was asked to become involved by local residents who wanted an African-American in charge. He said only two developers — he and a team led by basketball great Magic Johnson — were willing to take on the project.

“No one else was interested,” he said. “There were no other developers that don’t look like me that were interested in coming into this community.”

In hindsight, he said, it was a mistake for him to get involved in entertainment and restaurants.

“It was a bad decision to go down that road,” he said.

After Yoshi’s San Francisco declared bankruptcy, Johnson decided to run the club and restaurant himself.

“I made another mistake,” he said. “We decided we’re going to try to resurrect it and create The Addition.”

He added: “We found out that operating that 28,000-square-foot facility was very difficult. We went six months. We couldn’t make it work. We had to close.”

Johnson said the only way to make the Yoshi’s space work is if the city “takes a different approach to the financial structure of this building” to keep it from being “loaded down with debt payments.”


EARLIER:At Yoshi’s, only the sounds of silence

  • Fog City

    Another debacle that will be attributed on the QT and whispered about in the corridors of political power as being the fault of African Americans. Prior to the destruction of the Fillmore District by intentionally planning and displacing its majority African American residents, there were many privately owned and operated facilities that were preserving African American culture and heritage day in and day out. The creation of the Fillmore Center, which was really done as a payoff to certain elements of the Black MisLeadership Class who themselves had been complicit in the evisceration of the Fillmore District was a predictable financial failure that will be used as another example of why blacks rely too much on government instead of their own initiative. Only a relative few people will remember that when blacks did rely on their own initiative the same class of people — and, no, it does not matter whether they are political conservatives or liberals — used the power of government to thwart, put in check and dilute the life blood of black initiative.