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Man behind the massive Ocean Beach Tower went to prison for a Ponzi scheme

A rendering shows the proposed tower at 2700 Sloat Blvd. in the Sunset District in San Francisco. | San Francisco Planning Dept via Solomon Cordwell Buenz

John Hickey, one half of a San Francisco developer couple attempting to build a 50-story tower in the Sunset, has a reputation for proposing audacious projects that never come to fruition. He also has a history as a con man.

In 2004, Hickey was promoting plans for a billion-dollar project that would erect three towers in India Basin and dramatically alter the city’s eastern waterfront. The ambitious development proposal—dismissed as “crazy” by a former city planning director—would have created the largest residential towers in all of California. 

At the time, few people knew Hickey had already been indicted seven years earlier for a Ponzi scheme to develop land in Napa and Sonoma counties. Hickey and a co-conspirator bilked 700-plus investors out of roughly $20 million, according to court records. Some of the money went to pay off early investors; some of it went to personal use. Hickey spent 15 years ensnared in civil and criminal investigations and was eventually sentenced to 97 months in prison.

As of 2016, three years after his release from prison, Hickey had paid just $5,150 toward the $17 million-plus he still owed in restitution to his victims.

The project Hickey and his wife, Raelynn, are now hawking in the Sunset—a tower that would stand out like a 589-foot sore thumb in the sleepy beach neighborhood—bears an eerie resemblance to the fanciful towers he boasted he would build two decades ago. It’s unclear how this new project would be financed. And pinning down the true motivations behind the project, which has become a lightning rod on both sides of the local housing debate, has proven difficult.

On Wednesday, Raelynn Hickey answered the door at the couple’s two-story home in the Sunset, where a gold Cadillac Escalade was parked askew in the driveway. At first, she lied and said the couple wasn’t home. Then, she admitted her identity and abruptly declined an interview.

Tower of Power

A plant nursery currently occupies the proposed site of the tower: 2700 Sloat Blvd., which is just three blocks from Ocean Beach. Across the street from Sloat Garden Center is a five-story building—the most imposing structure in the neighborhood. The proposed tower would dwarf everything in its vicinity.

Sloat Garden Center is located at the proposed site for a 50-story tower in the Sunset neighborhood in San Francisco. | Source: Isaac Ceja/The Standard

The latest plans for the tower—after multiple, incomplete proposals for the site, according to city officials—were filed April 11 by CH Planning, a Reno-based company incorporated in 2021 and managed by Raelynn Hickey. In May 2022, the Planning Department notified the developer of multiple issues with the more modest proposal for a 12-13 story project. Three months ago, CH Planning came back with a plan four times taller. 

In the most recent revision, the proposed tower would include 680 condominiums along with 100,000 square feet of retail space, a wellness spa and a basement garage to fit 212 cars. The scale of the project has left some leading developers in the city befuddled.  

“I have many friends in the development community, and none of us can comprehend this project,” Oz Erickson, principal at developer Emerald Fund, told The Standard. “To the best of our experienced knowledge, none of us could remotely make this project work economically, much less understand how it would fit contextually in that neighborhood.”

The Planning Department rejected the most recent design, which was originally scheduled for a May hearing at the city’s Board of Appeals. But at the developers’ request, it’s been repeatedly postponed. A new hearing is now scheduled for July 26.

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CH Planning’s revised plans cited California’s Density Bonus Law, which allows developers to tack on more height in exchange for including affordable housing. On the books since 1979, the law has been significantly expanded by legislation written to combat the state’s housing crunch. 

John Hickey has taken the lead in discussions with the city, with CH Planning contending that the state’s Density Bonus Law should allow 2700 Sloat to proceed, in part because of the unique design of the tower: It includes four narrow, separate towers attached together on one base structure to skirt local rules on individual buildings.

Thousands of people have signed a petition opposing the project, and the city’s Planning Department summarily scoffed at the design, calling it “categorically out of compliance with both state and local laws.”

Sloat Garden Center is located at 2700 Sloat Blvd., where a 50-story tower is being proposed in the Sunset neighborhood in San Francisco. | Source: Isaac Ceja/The Standard

Nonetheless, Our Neighborhood Voices—a political group planning a ballot measure to undo state housing reforms—has seized upon the 2700 Sloat project, using the tower as a symbol of all that is wrong with legislation intended to accelerate housing production. 

Meanwhile, YIMBYs and lawmakers who support denser housing seem to be of two minds when it comes to the proposed tower.

Distraction or Real Deal?

The outlandish size of the 2700 Sloat project—and some of the arguments for and against it—have created a caricature of an otherwise serious issue. San Francisco is required to make room for 82,000 new units of housing by 2031. But a down market and impediments via local law and neighborhood opposition are making that target look more illusory by the day.

“This project has always seemed like a distraction to me,” said state Sen. Scott Wiener, whose bill SB 423 would extend and expand rules to streamline the creation of denser housing.

Opponents of the 2700 Sloat project have cast the tower as a symbol of what could happen in California if Wiener’s legislation is signed into law. Wiener said those arguments are not being made in “good faith.”

“We need more housing in all parts of San Francisco, including the west side,” he said. “Some of us are trying to work in the world of reality to make that happen.” 

State Sen. Scott Wiener | Camille Cohen/The Standard

Jane Natoli, the organizing director of YIMBY Action and a former financial crimes investigator, told The Standard that she supports the 2700 Sloat project because the city has steadfastly resisted housing in all shapes and sizes for decades. However, she called John Hickey's past projects and Ponzi scheme “red flags.”

“That deserves a lot of scrutiny, but that should be separate as to whether or not something like this [project] can even exist on paper,” Natoli said.

Erickson estimated that the all-in costs per unit for the 2700 Sloat project “would probably exceed $1.5 million per apartment,” putting the total cost of the project above $1 billion. This would likely require rents significantly above current market rates. 

“I am not aware of any lender who would seriously contemplate financing a billion-dollar project in that neighborhood,” Erickson said. 

Caryn Mason, a 22-year resident of the Sunset who was shopping Wednesday at the nursery where the tower is being proposed, had never heard of the project until she was shown a rendering of the structure.

“Put me down for ‘no,’” she said. “The picture that you’re showing me doesn’t fit in our neighborhood.”

And yet, all of the consternation over 2700 Sloat could wind up being all for nothing.  

The Hickeys’ requests for delays—along with the context of John Hickey’s past crimes—have given some the impression that the grandiose project was never meant to be realized. If true, that would be a ruse some cynics might call history repeating itself.