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Lawsuits multiply over Fillmore Heritage Center

Opening night of the Fillmore Heritage Center in November 2007.

NEIGHBORHOOD BUSINESSMAN Agonafer Shiferaw has filed a lawsuit in federal court alleging fraud and deceit at the Fillmore Heritage Center. It charges that Mayor London Breed, Supervisor Vallie Brown and other city officials violated laws and engaged in other wrongdoing that has cost roughly $100 million in failed public and private investments — and “contributed to the stagnant economic conditions that continue to plague the city’s historic Fillmore District.”

Shiferaw, who owns local commercial real estate and formerly operated the Rasselas Jazz Club at 1534 Fillmore, alleges the city’s attempt to find a new owner of the center — including the vast space once occupied by Yoshi’s jazz club and restaurant — “was characterized by irregularities that side-stepped procedural safeguards.”

Four days before Christmas, he filed for an injunction to prevent the city from further leasing or selling the center. The issue is scheduled to be heard on February 13.

The suit zeroes in on the city’s request for proposals in February 2017, which Shiferaw claims bypassed prescribed procedures and set up a biased review panel of community and city representatives. The lawsuit alleges some members “had no discernible connection to the community, nor any qualifications other than that they were friends and supporters of London Breed” and that Breed informed two panel members — including the Rev. Amos Brown, who is also named as a defendant in the case — that they had been selected even before the process was announced.

Shiferaw, doing business as the Republic of Fillmore, claims that he submitted a timely proposal that met all of the conditions specified: having immediately available capital, offering a viable business plan and including a diverse set of community benefits. But he contends that when he complained to the city attorney and the Ethics Commission that the review was not being conducted fairly, the city abruptly terminated the process, rejecting all proposals. The suit charges the effort “was a fraud and a charade from start to finish, designed as a pretext and a smokescreen to sidestep state and local government contracting and bidding laws, and to steer the project into the hands of defendants’ chosen cronies.”

In October, the city gave control of the center, plus $50,000 to stage events under a six-month lease, to the New Community Leadership Foundation and the San Francisco Housing Development Corp. Shiferaw’s suit claims neither group has experience operating an entertainment venue.

Other lawsuits related to the center are also pending. Last August, the city attorney sued developer Michael Johnson, seeking repayment of $5.5 million plus interest that Johnson borrowed to build the center, but has not repaid.

In response, Johnson countersued the city, alleging city officials engaged in bad faith conduct by insisting that the venue continue to operate as a jazz club and restaurant “even when it became readily apparent that this use was not economically viable.” As a result, his lawsuit contends, while Yoshi’s on Fillmore generated an average of $10 million for each of the six years it operated, it had net losses of more than $350,000 each year.

Johnson claims he obtained an offer from Whole Foods to operate a grocery store, restaurant and brew pub in the space, which the city ignored. A jury trial has been requested, but no court date has been set.