Developers often rely on a sense of unflappable confidence to get real estate deals done. But there’s a thin line between optimism and utter delusion.
John and Raelynn Hickey, the controversial couple who have been trying to turn a nursery in the Outer Sunset into a monolithic, 50-story apartment tower no one seems to want, appear to be on the latter end of the spectrum.
Last month, the couple submitted a new application to the city’s Planning Department for a 100% affordable high-rise with 682 units. Unfortunately for the Hickeys, they no longer control the site of the proposed building.
That same month, their lender, Loan Oak Fund, seized the lots at 2700 and 2750 Sloat Blvd. through a judicial foreclosure. A spokesperson for the private lender confirmed that the Hickeys’ business entity no longer has any connection to or control of the property.
The duo had been among developers looking to turn “Ocean Beach into Miami Beach (opens in new tab)” by building waterfront high-rises, with little regard for the desires of residents of the sleepy Sunset, which is composed mostly of single-family homes and low-slung buildings.
Their history of broken real estate promises and swindling investors extends more than two decades.
In 2004, John Hickey pitched plans for the largest residential towers in California, in San Francisco’s India Basin. Those failed to come to fruition after he was indicted and spent 97 months in prison in connection with a Ponzi scheme (opens in new tab) to develop land in Napa and Sonoma counties.
He and a co-conspirator bilked more than 700 investors out of roughly $20 million by falsifying property records, according to court records. Instead of using the money to acquire real estate for redevelopment, they paid off early investors, and the remainder went to personal purchases.
As of 2016, three years after his release from prison, Hickey had paid just $5,150 toward the more than $17 million he owed in restitution to his victims. When The Standard tried to interview Raelynn Hickey two years ago at the couple’s two-story home in the Sunset, she lied about her identity before declining to speak with a reporter.
The couple this year unsuccessfully tried to declare Chapter 11 bankruptcy in an effort to delay the foreclosure process for the lot on Sloat Boulevard. Two weeks before they lost the parcel, a U.S. Bankruptcy Court judge dismissed their case — siding with Loan Oak, which argued that the couple was acting in bad faith rather than earnestly trying to restructure their organization and debt.
The latest proposal is yet another pivot from previous iterations of the Hickeys’ pitch for a 50-story tower, before they tried to advance a more modest two-building concept. The couple purchased the property in 2020 for $8.5 million.
The Hickeys did not respond to requests for comment.
All of their previous proposals for the site involved tapping into state density bonus laws that would have allowed them to bypass the neighborhood’s height restrictions. Both applications were rejected by city planners.
It is highly unusual for a developer to continue pursuing entitlements for a property they’ve lost in foreclosure unless they have a relationship with the entity that would eventually buy the property from the bank.
Ms. Hickey previously told the San Francisco Business Times (opens in new tab) that she intended to offload 2700 Sloat Blvd. this year to a partnership of development organizations that convene on a per-project basis. That deal was reportedly tied to the redevelopment getting entitled.
A spokesperson for the Planning Department said the Hickeys’ latest proposal is technically active but neither complete nor code-compliant. A spokesperson for architecture firm SCB, which submitted the application on the couple’s behalf, said it is “not currently actively working on progressing the design documents” but remains on hand to answer questions from planning staff.
By the time the lots came up for public auction last month, the Hickeys had accumulated more than $12 million in unpaid debt. Lone Oak took control by submitting a credit bid of $11.1 million, using the debt owed, rather than cash, to win the auction.
The Hickeys can dream all they want, but their history is finally starting to catch up with them.