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[Orchid] SF's Phelan Building Tosses Jewelers Out After 100 Years
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Christine Dhein Tuesday, December 11, 2012
   
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    December 11, 2012

    Press Release: Contact:
    Alan Revere or Glenda Ruth
    415-391-4179
    alan AT revereacademy. com
    glenda AT revereacademy. com

    or

    Lyra Maceda of Line Edit Design
    Phelan Building tenant
    shinnovative AT aol. com
    650-342-7109

    San Francisco to lose its status as Northern California's jewelry
    center: Jewelers cleared out of Phelan Building after 100 years 

    Built in 1908 with jewelers in mind, the Phelan Building has been
    home to Northern California's jewelry industry for over a century.
    However, since Thor Equities' 2008 purchase of the building at the
    corner of Market, Grant and O'Farrell streets, jewelers have been
    systematically cleared out floor-by-floor to make way for new
    tenants. Rather than collecting rent from hundreds of tenants, Thor
    has shown a preference for larger corporations, which can occupy an
    entire floor. The building's classic marble and oak halls with small
    offices have been conducive to individual goldsmiths and jewelry
    businesses. But this is about to end as Thor reconfigures the
    building to create large, open spaces preferred by modern hi-tech
    companies like Appirio, Voxer and the giant Sears Holdings, which
    now call the building home. 

    James D. Phelan, the former Mayor and Senator, constructed the
    building that bears his name immediately after the 1906 earthquake
    to further his vision to develop San Francisco's culture. A
    passionate supporter of the arts, Phelan welcomed jewelers to his
    landmark building and bequeathed a cash prize for California artists
    that is still awarded. But now the Phelan Building is closing its
    doors to the artists whose creativity James Phelan thought was so
    crucial to the life and development of his beloved city. 

    Thor Equities, LLC, is a real estate development and investment firm
    founded by Joseph Sitt, based in New York City that specializes in
    revitalizing and adding value to urban properties in high-density
    areas. The company owns the historic Palmer House Hilton in Chicago
    and much of the oceanfront of Coney Island. It also owns property in
    New York City, Washington D. C., Philadelphia, Puerto Rico, Mexico,
    Boston, Atlanta, Baltimore, Norfolk VA, Miami, Chicago, Cincinnati,
    Boston, Detroit, San Francisco, Orlando, and Los Angeles. 

    From Wikipedia - No one begrudges Thor Equities its right to conduct
    business. However, what appear to be merely lines crossed off a
    spreadsheet in an attempt to bolster the bottom line, is in fact,
    not that simple. The Phelan Building is not just another asset,
    whose tenants are interchangeable. It was designed to be the home to
    a vibrant artisan community whose handwork and skill have been
    passed on by master to apprentice and is the result of years of
    patient practice. There are dozens of small businesses in the Phelan
    Building, run by expert artisans from around the world. They have
    thrived in the classic building and served generations of San
    Francisco residents. The well being of their businesses, their
    employees and their families, as well as their ability to serve
    customers effectively at the busiest time of the year, are now
    uncertain. They are being evicted not for cause, but to make the
    building attractive for large businesses, the same businesses City
    Hall likes to woo with tax breaks and special deals. The irony is
    that the artisans and entrepreneurs being evicted pay their full
    share of rent to the landlord and their full share of licenses,
    fees, permits, and taxes to San Francisco. 

    It is a sign of the times: Old world vs. new. Low-tech vs. high.
    Mealtime vs. drive through, handwork vs. computer work, real vs.
    virtual. These craftsmen and craftswomen take great pride in their
    work. "Most of us do things the old fashioned wayby hand," says Alan
    Revere, Director of the Revere Academy of Jewelry Arts, which is
    being forced out after 33 years. But it is not the economy that is
    leaving them behind. All of those evicted have succeeded through the
    recession. And all of these jewelers and suppliers would like to
    continue to do what they know and love. And so would their
    customers. Unfortunately for many, this will not be possible. 

    Thor Equities Takes Over 
    ---------------------------

    The first thing Thor Equities did when it bought the classic
    downtown building was to charge tenants to receive their monthly
    rent bills, $5 by mail and $2 by email. When one tenant, Tereza
    I?iguez of Shapes Studio mistakenly wrote her check for a penny too
    little, Thor aggressively hounded her with late rent notices hand
    delivered by security and certified mail to both her home and
    business until they received their payment, a check for one cent,
    delivered to Thor's New York office! 

    Longtime loyal building employees were fired, janitorial services
    were trimmed, and tenants were repeatedly interrupted without
    warning by construction, noise, electricity, and gas shutoffs, while
    trying to conduct business as usual. On the service elevator, a new
    sign appeared, "This elevator is for freight access ONLY Your
    cooperation is expected." A feeling of hostility and tension quickly
    developed between management and tenants. When leases came up for
    renewal, Thor required tenants to sign a termination clause. This
    allowed the New York corporation to terminate leases without cause
    and on short notice, some as little as 60 days. Next Thor began
    clearing floors, forcing tenants to move within the building at
    their own expense, and then eventually kicking them out, while
    assuring jewelers that they would remain safe on the ninth floor. 

    Five Centuries of Rent
    ---------------------------

    Despite the fact that years remain on many of the leases, Thor has
    demanded that its tenants leave. Those being evicted now, have paid
    well over five centuries of rent to the Phelan Building. In all,
    over one hundred small jewelry-related businesses will have been
    thrown out by March 1, 2013. Many of the evicted have been in the
    building for decades and some for generations. For most, there is
    little prospect of relocating and maintaining their businesses
    downtown, if at all. 

    Looking for New Space Now
    ---------------------------

    San Francisco is experiencing a run-up in commercial rents right
    now, placing it at the top of the nation. For jewelers, many of whom
    require both water and gas, the prospects of remaining nearby are
    slim to none. And yet this group of individual business owners would
    like to move together into a suitable downtown location, which is
    safe and compatible with the needs of jewelers. 

    Happy Holidays - for All but Jewelers
    ---------------------------

    Thor is clearing jewelers out at the most sensitive time of the year
    for them. This is when the Phelan Building's tenants are busiest
    making jewelry, filling orders, setting diamonds and creating gifts
    for their customers. Many received their notice to leave on the day
    before Thanksgiving! They will spend their holiday season consumed
    with survival, not cheer. With the cost of San Francisco commercial
    space leading the U. S., finding a new location at this time of year
    is downright depressing and draining to the business owner. Instead
    of making treasures and gifts for others, the Phelan Building's
    jewelers are just trying to cope and figure out where they will be
    in two months and how much it will cost them to stay in business. 

    James Phelan, Patron of the Arts
    ---------------------------

    Businessman, political leader, patron of the arts, and
    philanthropist, James Duval Phelan was born in San Francisco on
    April 20, 1861. As one of San Francisco's most prominent citizens,
    Phelan was honored on many occasions. He served as president of the
    Adornment Association and president of the Art Association." 

    -Excerpted from the Online Archive of California 

    In an open letter to the community, Mayor Phelan wrote, 

        "Apart from the consideration of utility, there is much to be
        done to make San Francisco an ideal city. There are citizens,
        utilitarian in their lives as well as in their aspirations, and
        this class must be educated to an appreciation of the beautiful,
        before they will give their vote and support to any movement
        whose end is beauty. 

        Then would follow museums, galleries of art, and theaters until
        San Francisco, by reason of its remarkable meteorological
        advantages, would assume the position of the most beautiful city
        in America, and its population the most artistic and pleasure
        loving, drawing to its realm myriads of strangers from
        year-to-year. 

        The influence of beauty would not be lost on the rising
        generation; and whereas we might at first have to import talent,
        thereafter our native population will be educated to such a
        degree of perfection, by reason of its environment, that artists
        and musicians, and men and women of taste would be a
        distinguishing part of this now cosmopolitan, but then American
        community." 

    - San Francisco newsletter, Christmas number, 1897 

    The James D. Phelan Art Awards, bequeathed by the former Mayor of
    San Francisco and California Senator, recognize the achievements of
    California-born artists in a variety of disciplines and is part of
    the Art Awards Program of The San Francisco Foundation. 

    So Much for San Francisco Culture, History, Art and Architecture
    ---------------------------

    Thor is literally tearing out the guts of this architectural gem,
    including removing the marble walls with oak trim and other
    architectural features, as each floor is cleared. Despite filling
    its floors for one hundred years, the jewelry community has been
    driven out. This cultural treasure cannot be saved. The Phelan
    Building artisans that have serviced countless customers, jewelry
    stores and small manufacturers in Northern California are dispersing
    and disappearing. 

    Made in San Francisco No More
    ---------------------------

    The jewelers in the Phelan building include goldsmiths, engravers,
    gem merchants, stone setters, repair shops, custom order businesses,
    and tool suppliers. These are artisans, both craftsmen and
    craftswomen, who use their hands to create. They already struggle
    against cheap foreign-made products and services. With the business
    climate in San Francisco leaning so far toward big companies, it is
    strangling the small entrepreneur. And now that many have to uproot
    their businesses, it is clear that a lot less will be made in San
    Francisco. A legacy of fine local craftsmanship is coming to an end. 

    Among the Departing
    ---------------------------

    Revere Academy of Jewelry Arts, founded in 1979 by Master Goldsmith
    Alan Revere, has trained over 10,000 jewelers and jewelry hobbyists
    from around the globe. Many consider it to be the preeminent
    professional jewelry school in the US. Revere has thrived on the
    ninth floor and has a long list of successful graduates. He has
    helped dozens of the school's former students to become tenants in
    the Phelan Building as their skills developed. But now things look
    very different. 

    "We watched as Thor slowly renovated floors one-by-one," says
    Revere. "And we were consistently told our floor was safe. A few
    weeks before we received our termination notice," he continues, "The
    building manager told a room full of us that the ninth floor was
    reserved for small tenants and would remain the home to jewelers."
    Obviously someone was misled. "Despite the fact that years remain on
    our lease," Revere continues, "we have been evicted." The prospect
    of relocating his unique 2000 square foot school is overwhelming.
    Having looked extensively in the City, Revere has come to the stark
    realization that his California State approved technical school
    needs to adapt, leave San Francisco or cease to exist, despite
    demand. 

    We Love Our Work
    ---------------------------

    John Donivan and his wife Jo-Ann Maggiora Donivan (jjdon AT pacbell.
    net) have worked together in their ninth floor jewelry studio for
    three decades. Both are highly skilled master jewelers who
    specialize in gold and platinum work for stores and private
    customers. They too are devastated by the idea of moving all of
    their equipment and tools, as well as the tragedy of having to leave
    the jewelry community they have worked with for decades. "I've been
    in this space for 30 years and I thought I would die here," said
    John. "I don't want to move for many reasons, one being the packing
    and physically hauling all of this equipment to an as-yet
    undetermined place. But the important thing is the big picture. All
    these artisans and their shops will scatter to the wind. There just
    will no longer be a center for jewelry in San Francisco." A sign
    recently posted on their door says, "We will stay in business!! We
    love our clients and our work!!!" 

    Shapes Studio Moves Out
    ---------------------------

    Tereza Iniguez was forced to move her 30-year-old business, Shapes
    Studios Hair Salon to Sutter Street four months ago. Tereza says
    that as soon as Thor took over, a hostile, anti-tenant management
    was put in place. Her business had to shut down numerous times
    without warning because of plumbing, electrical and construction
    work being done in the building with no notice. 

    When Tereza's lease came up for renewal in 2010, she says, "Thor
    announced that rent would be due on 1133 square feet rather than 831
    square feet as in the past, because they said it had been
    miscalculated for 10 years. I had to pay for 36% more square feet
    without gaining any space in my suite. I was strong-armed into a
    one-way lease favoring Thor Equities. I was forced to sign a clause,
    which gave Thor the ability to terminate my lease at any time, with
    short notice. My choices were to sign a bad lease, leave in 30 days,
    or stay on month-to-month at triple the rent, not much of a choice,"
    says Tereza. At the time, management reassured her she would not be
    affected by changes in the building so she went ahead and renewed.
    But halfway through her lease, she was kicked out with a limited
    time to search, relocate and move her thriving business. "It was a
    nightmare. It's one thing, if you are starting or expanding a
    business and you planned for the expense. But this was a big shock."
    She searched and found a new location but since it would not be
    ready in time, Tereza requested a 4-day extension. Thor refused. "I
    had to move my business into storage until the new space was built
    out. It cost me in so many ways." 

    "Thor Equities works diligently not just for its financial gain, but
    to mow down anyone in its way," says Tereza, now that she is clear
    of the Phelan Building and feels free to speak honestly. "Thor knows
    it can push around small businesses, which are usually just hard
    working individuals or families trying to survive." 

    Master Craftsmen and Craftswomen Leave San Francisco
    ---------------------------

    Nancy Wintrup is one of 125 jewelers in the US to achieve the status
    of Certified Master Bench Jeweler? by Jewelers of America, the
    largest jewelry trade organization in the country. Only a handful of
    women have achieved this level. Nancy has spent over 40 years
    working, "at the bench." Formerly a member of the International
    Jewelers Union, where she met Alan Revere in 1975, Nancy operates
    her own studio and teaches at the Revere Academy, down the hall on
    the ninth floor. 

    Like the others, she will be leaving her Phelan Building office
    soon. "It is so sad to see the destruction of our small business
    community in the Phelan Building," she says. "Thor Equities has
    shown itself to be a very difficult landlord. After 32 years as a
    tenant I will be closing my San Francisco studio." 

    From a Jeweler/Tenant
    ---------------------------

    Many of the Phelan Building's tenants are reluctant to receive
    publicity or draw attention because of the nature of their
    businesses. Here are two tenants' experiences with Thor: 

    After studying at the Revere Academy, I decided to get my own space
    in the Phelan Building so I could be near other jewelers. For
    several years I shared a studio and then I signed a lease for a
    small space on my own. I moved in, set up shop, hung cabinets, had
    my phone and DSL installed, the whole works. But when I returned
    from a weeklong business trip, I received an eviction notice. I
    literally had not been there for even a month when I was uprooted. 

    I was given until the end of August last year to move out. Luckily a
    suite on the ninth floor opened up. I was assured jewelers would
    remain there so I signed another lease. Thor agreed to install water
    and gas, paint and put in a new floor. But it took 6 weeks to get
    done. Finally in mid August, as I started to move my things up to 9,
    I was told I needed to wait because Thor found asbestos in my wall.
    So I had half my tools and equipment on one floor and half on
    another, while trying to do business. That's when Thor said the
    asbestos removal would take several weeks longer to complete.
    Meanwhile I was told I had to get everything out of the old suite
    before end of August. So with no place to put my things, I moved it
    all temporarily to an empty space on another floor. The asbestos
    work dragged on for weeks and eventually my studio was ready to
    occupy. I had not been able to work efficiently all summer at this
    point. And now, after just one year of occupancy I have received an
    eviction notice. 

    - Anonymous tenant 

    From a Gem Dealer in the Phelan Building
    ---------------------------

    I am a proud gem wholesaler who has been based in The Phelan
    Building for over half my life. This has become my second home,
    surrounded by many good business colleagues as neighbors. In April,
    I received notice from management to vacate our suite after 33
    years. This came as a shock to me. Nevertheless, I was still
    grateful for being able to relocate to the ninth floor with fellow
    colleagues in my industry. But after working out of the new suite
    for a mere three and a half months, I just received another
    termination notice last week to vacate our space yet again. Not only
    did we just finish relocating and organizing all of our heavy
    equipment, but we have incurred huge moving expenses already, with
    much more ahead, all of which comes out of our hard-earned income. I
    understand that the landlord is not breaking the law by evicting us.
    However, I feel that we have been wronged by an unethical standard.
    A clearer warning should have been set in place if there was even a
    question that we were going to be sent packing again. I received
    eviction notice on November 20th, and now have to vacate our space
    in 60 days. For those of us in the jewelry business, the holiday
    season is the most critical time of the year for our earnings, with
    as much as half of our business coming in October to December. 

    Judging from my personal situation, this might just be an
    unfortunate circumstance. But in the grand scheme of things, what
    the landlord is doing is crushing the jewelry industry of San
    Francisco. When they vacated the entire 3rd and 5th floors for
    tenants who were able to muscle their way in by leasing entire
    floors, some jewelers were able to relocate, but others were forced
    to shut down their businesses as a result. 

    Now they are vacating the entire ninth floor, which is home to
    several key players in the industry such as Revere Academy, our tool
    supplier, lapidary shop, setters and many others. These are little
    businesses that many retail jewelers in the region rely upon. This
    small community, based in The Phelan Building, has been the
    cornerstone of the San Francisco jewelry industry for over 100
    years. It is a shame to see this tight-knit community of tenants
    vanish over a seemingly casual business decision made in an office
    three thousand miles away, one that brings extremely harsh
    consequences for my colleagues and me. If this note does nothing
    more than to add to the list of complaints from other unhappy
    tenants, please know this: those of us who are being evicted from
    The Phelan Building do not take this lightly. We are not only being
    forced to leave at the most critical and inconvenient of times, but
    we are also being stripped of our pride and dignity, which have
    defined who we are as San Francisco small business owners for the
    last three decades. 

    - Gem merchant in the Phelan Building 

    Industry Reaction from San Francisco
    ---------------------------

    As proprietor of a fine jewelry gallery near Union Square, I have
    relied on the jewelers of the Phelan Building since opening my doors
    seven years ago. The artisans of the Phelan Building have been a key
    resource and foundation for my success. We have used many of the
    building's fine craftsmen; goldsmiths, engravers, repair shops,
    diamond and gem setters, etc. In addition we now represent many
    graduates of the Revere Academy of Jewelry Arts, which is one of the
    anchors and treasures of the jewelry community. When I heard that
    the owner was clearing the building of successful small businesses
    that pay their rent, I just shook my head. What has become of us? 

    Peter Walsh, owner
    Manika Jewelry
    11 Maiden Lane
    San Francisco, CA 94108
    415-399-1990
    manikajewelry.com

    Reaction from an Oakland Jeweler
    ---------------------------

    For 30 years I have been coming to 760 Market Street for business.
    Like many in the region, I rely on the high quality goods and
    services of the building's jewelry professionals. It is
    incomprehensible that the property owner would show such disregard
    for it's long term tenants, their businesses, their families and
    customers. It's a sad day when corporate profit is more important
    than small businesses. 

    Bill DeGroot, owner
    Janko Jewelers, Oakland
    510-836-1586

    From a Jeweler in Oregon
    ---------------------------

    I have taken many classes at Revere and wish to continue to do so.
    Coming to Revere Academy is an experience every jeweler remembers
    for life. Being internationally known within the jewelry community,
    Revere is a destination experience for all those who take their
    craft seriously. The opportunity to work and learn alongside
    nationally known jewelers gave me the tools to be successful. I am
    deeply saddened at the prospect of closing the Revere Academy.
    Nowhere in the United States can one find the blend of old world
    techniques and cutting edge skills, taught by jewelers who are true
    artists practicing their craft. 

    Jeremy Small
    Brookings, Oregon

    Reaction from Dartmouth College in New Hampshire
    ---------------------------

    The Revere Academy of Jewelry Arts is a preeminent American jewelry
    trade school. The Academy's influence on the field of jewelry making
    cannot be overstated. The school has trained countless jewelers and
    designers. Many businesses and careers owe at least part of their
    success to time spent at the Revere Academy. On a personal level,
    I've had the privilege to both take classes and teach at the
    Academy. The school was a pivotal component in my education. I can't
    imagine contemporary goldsmiths not having the Revere Academy of
    Jewelry Arts as a resource in the future. It's that important! 

    Jeff Georgantes
    Jewelry/Metals Instructor
    Dartmouth College
    Hanover, NH 03755

    Reaction from a Goldsmith in Scottsdale, Arizona
    ---------------------------

    The Revere Academy is far more than just a school and a place where
    students can learn about jewelry. Revere has created a vibrant
    community that stretches all the way around the world. The school
    has touched the lives of thousands of people in a profound and
    wonderful way. I am thankful to be one of those people. It has been
    26 years since I first came to Revere and 8 years that I have been
    teaching at the Academy. It has been a significant part of my life. 

    Michael David Sturlin
    Scottsdale, Arizona
    (480) 941-4105

    Phelan Building Survival Group on Facebook
    ---------------------------

    A group of customers, students and tenants have mounted a Facebook
    page for those involved in the mass displacement. 

    More from Wiki 

    Thor Equities is a full service real estate development and
    investment company whose capabilities include acquisitions,
    financial management, development, property management, and leasing.
    Thor specializes in value-added investments in shopping centers,
    malls and mixed-use urban projects. Today, Thor's current portfolio
    of properties totals 12,000,000 square feet (1,100,000 m2) and is
    valued at more than $3 billion. Thor manages several property funds
    whose investors include pension funds, investment banks, college
    endowments, and foundations. 

    Quote from Bizjournal. com: "The Phelan Building, built in 1908,
    sits on a triangular-shaped corner between Market and O'Farrell
    streets. New York-based Thor Equities bought the building close to
    four years ago, renovated it and targeted technology tenants to fill
    it. "I believed San Francisco would get stronger as technology
    companies got stronger," said Joe Sitt, chairman and CEO of Thor.
    "It played out as we expected it to play out." Sitt said Voxer is
    paying more than $50 per square foot for its space, about double
    what the landlord was asking a year ago." 

    Additional Resources 
    ---------------------------

    Sears Holdings Establishes New Apparel Office in San Francisco 

    Thor Equities signs nation's fourth largest retailer to occupy
    25,000 square feet in Market Street's historic Phelan Building. 

    SAN FRANCISCO, Feb. 25 /PRNewswire-FirstCall/ -- Sears Holdings
    announced today that the company has signed a long-term lease with
    Thor Equities to occupy 25,000 square feet in the historic Phelan
    Building, officially establishing a new San Francisco apparel office. 

    http://www.ganoksin.com/gnkurl/ep7zte 

    Bizjournal. com has written articles about all the other big
    companies that have moved into the Phelan Building. Appirio (11th
    Floor): http://www.ganoksin.com/gnkurl/ep7ztf 

    This article is about the Phelan building specifically, Voxer and
    Appirio moving in: http://www.ganoksin.com/gnkurl/ep7ztg 

    Images
    ---------------------------
    http://www.ganoksin.com/ftp/sf100years.zip


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