A beleaguered Union Square hotel just sold at auction for a major discount on its total debt.
The former Hotel Union Square at 100-120 Powell St., which has been shuttered since hosting unhoused residents during the pandemic, offloaded its $102 million in debt for a price in the range of $30 million.
The purchaser, known as Hotel Union Square LLC, is linked to commercial real estate investor Mahmood Alam, who has ties to a string of controversial gas stations in Mendocino County.
The property, which opened as the Golden West Hotel in 1908, sits one block from the cable car turnaround on a stretch of Powell Street plagued by vacancies. Previously managed by private equity firm Rockpoint and Highgate Hotels, it failed to reopen after being converted to temporary lodging for homeless residents from mid-2020 to late 2021.
In addition to a flat daily payment from the city while the hotel was occupied, the previous owners received a $5.3 million settlement for water and smoke damage incurred during its use. However, Rockpoint defaulted on its mortgage in 2023, which left the property languishing. The last sign of life, a Swatch store on the ground floor, closed this year.
Several SF hotels were used as temporary shelter during the peak of the pandemic, and two failed to reopen. The other is the Hotel Whitcomb on Market Street; its owners were paid $89 million for a 33-month contract and then $32 million for damages and lost revenue.
The deal could enliven the Hotel Union Square, which has 131 rooms and a storied past that includes rumors of a haunting.
During the Prohibition era, the hotel had a speakeasy called the Golden Bubble hidden away in its basement, which drew in patrons with promises of booze and music. The hotel was a favorite of Dashiell Hammett, author of “The Maltese Falcon,” who had a tumultuous affair there with playwright Lillian Hellman. Legend has it that Hellman’s spirit lingers in Room 207, which she and Hammett frequented together. Former guests have reported strange sounds, drops in temperature, and even sightings of a woman pacing.
A representative for Alam didn’t respond to a request for comment.
The Union Square Alliance is hopeful about the property’s evolution. “As Powell Street and the rest of Union Square district continues to be on the rise,” said Marisa Rodriguez, the group’s executive director, “we look forward to hearing the new owner’s vision for the space and are excited for the possibilities.”