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City To Close Historic Berry Hotel

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On Tuesday Feb. 24, the City Council authorized the purchase of the Berry Hotel from its latest owners, developer AF Evans. Despite the efforts of the developer to restore the hotel and maintain its use as housing for those with very low incomes, the city will soon close the Berry, without a plan to reopen it.

Built in 1929, the Berry was part of Sacramento’s downtown hotel district, interspersed with theaters and department stores on the blocks near K Street. The Berry and other hotels like the Clunie, the Land, the Sacramento and the Clayton offered nightly rooms to some, while others were rented on a monthly basis. In the era after World War II, downtown hotels faded in popularity compared to the new motor hotels. As redevelopment changed the face of downtown Sacramento, destroying many rooming houses downtown, hotels like the Berry became more strictly residential hotels, renting almost entirely to monthly tenants. Because the rents were generally less expensive than other housing, those with the least money to spend moved into these hotels. By 1929 standards, the Berry was a comfortable and luxurious place; by the 1970s and through today, it was housing of last resort, one step above living on the street. These hotels became known as "single room occupancy" hotels, or SRO hotels.

In 2007, AF Evans and Trinity Housing purchased the Berry with the intent of renovating the hotel, but maintaining its role as an SRO. To make this project feasible, AF Evans applied for Tax Credit Allocation Committee (TCAC) low-income housing bonds. Housing developers can obtain tax credits when building low-cost housing, which helps make low-cost housing more economically feasible. A non-profit developer like AF Evans does not need tax credits, so these housing bonds can be sold to another company who needs a tax write-off. AF Evans’ objective was to use the money generated by the sale of the bonds to repair the interior of the hotel, replace its aging plumbing and electrical systems, and retain almost all of its 109 rooms.  A number of rooms were to be converted to ADA-accessible use, but all would be affordable units. The agreement also included provision for an on-site case manager who would provide supportive services for residents of the hotel who are disabled or senior citizens.

The current economic crisis made the sale of tax-credit bonds nearly impossible, as very few businesses are in need of a tax write-off. The bonds could not be sold, and AF Evans returned the tax-credit bonds to TCAC. They have tried to maintain the hotel, and have spent considerable time and effort figuring out how to repair the building, but the costs of repair are far greater than the income that can be generated from rents. Because they planned to vacate the hotel, rooms were not rented out as they became vacant, and the hotel currently has only about 50 tenants. Due to their inability to fund the project, AF Evans and Trinity Housing decided to give up sell the hotel to the Sacramento Housing and Redevelopment Agency (SHRA) for $1.

SHRA considered several scenarios before deciding on closure. Keeping the hotel open in its current state is not possible due to the deteriorated state of the building. Carrying out the developer’s plan to restore the hotel would cost about $13 million, and would still require relocation of the building’s occupants while construction was underway. On February 12, the SHRA board decided that the hotel should be closed until better economic times. This plan will still cost about $2.5 million to relocate the current residents and secure the building. AF Evans had developed a relocation plan in order to temporarily move residents during the building renovation. With the ownership change, the city is now responsible for carrying out the relocation plan, but instead the move will be permanent.

The closure of the Berry means that Sacramento’s stock of SRO hotel rooms will drop by 108 units. In 1986, there were over 1000 SRO units in Sacramento, down from about 4000 units in the 1960s. In 2006, the city of Sacramento passed an ordinance committing to the maintenance of the remaining 712 SRO hotel rooms in downtown Sacramento. If rooms were lost, the city of Sacramento is responsible for creating replacement units. Since the ordinance was passed, two hotels have closed, leaving about 630 units, with no replacement units built or under construction. After the Berry closes, about 520 SRO units will remain.

SRO housing is, admittedly, the housing of last resort, but in these economic times, many people are in dire need of affordable housing. If they cannot find housing they can afford, they can become homeless. As low-income housing in rooming houses and SROs has disappeared, homelessness has grown into a national epidemic. SRO hotels are often indifferently maintained, but they are preferable to a tent by the river or a spot on a park bench. As the number of SROs shrink, the number in tents or on park benches grows. Can we afford to wait until better economic times when the need for affordable housing is greatest in times like these?

Another factor in the story of the Berry is the historic nature of the building itself. The building is not listed on the current list of city landmarks, only because the city has not placed it on the existing landmarks list, which supplanted an earlier citywide list of historic buildings. Past surveys of Sacramento’s historic buildings identified the Berry as a priority structure, worthy of preservation for its architectural merits and its association with Sacramento’s history. Even its connection with Theodore Kaczynski, the infamous Unabomber, who briefly stayed in the Berry, adds to the building’s legacy. Loss of the Berry Hotel would rob our city of part of its architectural heritage, as well as a home for 108 people with few other options for housing.

There is another alternative to allowing the Berry to sit vacant, at risk for another fire like the one that destroyed the buildings at the corner of 8th &K, or those on 9th & J years earlier. Compared to new construction, $13 million for 108 units of very low income housing is practically a bargain price. Because restoration of historic buildings requires more labor than materials, a restoration project would mean more jobs for Sacramento construction workers than a new project of similar size, and require far less consumption of raw material than a new building. It would also prevent the Berry from becoming another boarded-up vacant building downtown. Because the building will continue to deteriorate whether or not it is occupied, that $13 million repair figure will only grow with time, so the sooner the project is taken up, the less it will cost. Fast action would also reduce the risk of disaster by fire, or demolition by neglect. As a renovated building, properly run, the building could become an asset to the community, and a place of hope for about a hundred Sacramentans. As a vacant hulk, it can only represent lost hopes and missed opportunities.

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