Tipsheet

Worse and Worse: California's Downward Spiral Continues

Guy Benson
Guy Benson  |  June 08, 2023 1:15 PM

California is one of the nation's foremost epicenters of 'progressive' rot and woke excess.  We've covered to coddling of out-of-control criminals, the backlash-causing attack on merit in education, and the closures of major brick-and-mortar retail locations in San Francisco -- from a popular a Whole Foods, to large department stores, to Walgreens and Starbucks franchise locations.  San Francisco's streets are strewn with drug paraphernalia and human waste.  Many are describing a potentially irreversible downward spiral in what was long considered one of the country's nicest and richest cities.  In case you missed Leah's piece yesterday, the blows just keep on coming.  Local leaders recently launched a glitzy, airbrushed, multimillion-dollar ad campaign to try to woo tourists back to the City by the Bay. Literally days later, this happened:

The owner of two of San Francisco’s biggest hotels — Hilton San Francisco Union Square and Parc 55 — has stopped mortgage payments and plans to give up the two properties, in another sign of disinvestment in hard-hit downtown. Park Hotels & Resorts said Monday that it stopped making payments on a $725 million loan due in November and expects the “ultimate removal of these hotels” from its portfolio. The company said it would “work in good faith with the loan’s servicers to determine the most effective path forward.” The 1,921-room Hilton is the city’s largest hotel and the 1,024-room Parc 55 is the fourth-largest, and together they account for around 9% of the city’s hotel stock. The hotels could potentially be taken over by lenders or sold to a new group as part of the foreclosure process...

“After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market. Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges — both old and new,” said Thomas Baltimore Jr., CEO of Park Hotels, in a statement. Those challenges include a record high office vacancy of around 30%,concerns over street conditions, a lower rate of return to office compared with other cities and “a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand,” he said...Parc 55 is a block from Westfield San Francisco Centre, the mall where Nordstrom is departing, and the block where Banko Brown, an alleged shoplifter, was killed in a shooting outside a Walgreens in April. Nearby blocks are also full of empty storefronts, as tourist and local foot traffic hasn’t fully recovered.

Meanwhile, San Francisco is being forced into hefty settlement payments with other hotels, who've sued after their facilities were trashed as a result of a pandemic-era city program involving homeless people (now described by activists and journalists as 'the unhoused' or 'people experiencing homelessness'):

San Francisco could pay up to $19.5 million to settle a lawsuit over property damages at one of the hotels that provided emergency housing during the pandemic. The owners of Hotel Whitcomb on Market Street filed the complaint against San Francisco on April 13 of this year. They allege the historic hotel endured millions in property damage resulting in loss of use by the city’s shelter-in-place hotel program, part of a statewide effort called Project Roomkey that opened up empty hotels during the pandemic to create emergency shelters. The settlement is the latest agreement between the city and owners of the hotels that stepped up during the COVID-19 pandemic to provide emergency housing for people experiencing homelessness during the first two years of the pandemic. That has included $2.9 million to the Tilden Hotel and $5.3 million to Hotel Union Square.

...The city expects to pay out around $26 million in total for property damage payouts from the shelter-in-place hotel program, according to a city budget report released in February...life was not always easy inside the hotels. Staff and residents at Hotel Whitcomb were often on the front lines of the overdose crisis that the city continues to endure. About 400 people were housed there during the pandemic, many of whom struggled with substance use disorders. On-site services helped prevent overdoses and encourage safer drug use, such as clean needle exchanges and training on how to administer the overdose-reversal drug naloxone. At least 18 people overdosed at Hotel Whitcomb from the time it first opened its rooms for the program in April 2020 to April 2022, KQED reported while the program was still in place.

The "progress" keeps progressing. Meanwhile, this is playing out in California. Journalists are happy going along with the state's preferred 'climate change!' spin, but policies and regulations are indisputably taking a toll on the state's mushrooming affordability crisis (a major driver of the population exodus). "State regulators in recent years have struck down attempts by insurance companies to raise property rates that would offset their inflation costs. The state last year required insurers to drop prices for owners who have fireproofed their buildings. The insurers must set home-insurance rates in California based on their historical loss experience, not future loss projections," the Wall Street Journal reports.  Major insurers like State Farm and Allstate are pulling up stakes:


The leader of the state, who was also San Francisco's mayor for years, is consumed with attacking the 'authoritarianism' of red states, and his own state fails, driving people away by the hundreds of thousands.  Early this week, Gavin Newsom was threatening "kidnapping" charges against Ron DeSantis.  That embarrassing, faux virtue-signaling performance has blown up in his face, as expected:


The overwhelming problem in California are the policies of California -- and the people who keep blindly voting for the sorts of politicians who are incapable of changing direction.

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