SF’s Parkmerced Plagued by Crime, Vermin, Squatters, Debt

Maximus Real Estate Partners has more problems than $1.8 billion in troubled debt linked to Parkmerced — it also has crime, vermin and squatters.

The locally based owner of the 152-acre, 3,221-unit garden property at 3711 19th Avenue may have cut back on security and maintenance, leading to rising crime and blight, the San Francisco Chronicle reported.

Parkmerced is the largest single apartment complex in San Francisco. Regular complaints at the property include broken elevators, lack of lighting in public areas, mold and mildew, leaks, car break-ins, rodents, overflowing dumpsters and squatters taking over vacant units, according to tenants and public records.

“We have had numerous complaints that management is slow to respond,” Supervisor Myrna Melgar, who represents the area, told the Chronicle. “That is when we get involved. My staff spends more time on Parkmerced than any other neighborhood.”

Since the start of last year, 46 complaints have come to the city’s Department of Building Inspection resulting in notices of violation. Half of those are still open, according to the agency.

“There have been a lot of complaints about the change in perception and feeling of security,” Melgar said. “The police have not been able to keep up.”

Parkmerced, a planned development from Metropolitan Life and designed by Leonard Schultze and Associates, opened its first apartments in 1944 for homecoming war veterans.

Maximus has proposed redeveloping the World War II-era neighborhood south of San Francisco State University by adding 5,700 homes, 230,000 square feet of shops and restaurants, 80,000 square feet of offices and a 64,000-square-foot community center.

Although plans were approved in 2011, and new renderings put out in 2022, no construction has begun. Early last year, Maximus founder Rob Rosania told SFGate the project was stalled due to “sky-high construction costs, inflation and supply chain issues.”

Last month, $1.8 billion in loans backed by Parkmerced was turned over to special servicing at the request of the landlord, which noted its high vacancy rate and a looming loan maturity in December.

The most recent financials from September show an occupancy rate of 83 percent at the city’s largest apartment complex and a debt service ratio well below breakeven, according to Morningstar.

Bert Polacci, director of government relations for Maximus, said the landlord hasn’t cut back on services. He said the firm spends $10 million a year on maintenance at the complex “and has done so for nearly 20 years.”

During the pandemic, when the city was scrambling to shelter homeless residents, Polacci said Maximus provided roofs for vulnerable residents.

“We receive no credits or tax breaks from this,” he said. “We remain committed as we have always been to providing resident service and interact with emergency services whenever required.”

Others said Parkmerced was slow to respond to broken elevators, with some contending the landlord didn’t pay its maintenance tab.

In a lawsuit against Parkmerced Owners LLC, the maintenance company Planned Building Services said it was owed $2.9 million by the landlord. The original contract called for Parkmerced Owners to pay $185,000 a month to clean and maintain common areas, including the lobbies of all 11 towers and the property’s 44 laundry rooms, according to court records.

“PBS has repeatedly demanded payment under the terms of the written agreement, but Parkmerced has failed to make payment, forcing PBS to bring this action,” the lawsuit states. “Parkmerced repeatedly promised to pay the sums due only to fail to perform on those promises.”

Parkmerced has not responded to the complaint

— Dana Bartholomew