The Vice Hotel

One of the largest city-funded Care Not Cash hotels was allegedly run as a home for extortion, drug dealing, and other vices

Taken together, the accusations point to the possibility that San Francisco taxpayers have been subsidizing the management of what amounted to a vice hotel.

Mendoza "is dangerous and a reputed gang member of the Norteños," and "employees and tenants at Mission Hotel are fearful of violence," according to Aug. 23 court filings in which a THC attorney requested restraining orders against Mendoza to protect 17 housing clinic employees. "THC discovered defendant had been involved in criminal activity, including extortion, assaults, and threats of violence toward THC's employees and Mission Hotel tenants. The conduct is ongoing," staff attorney Fox wrote in the filings.

I was told during interviews with former THC employees, hotel residents, and social service providers who placed tenants in the hotel that Mendoza might have personally rented rooms off the books. When THC workers took over the hotel from Mendoza this summer, these sources say, they discovered tenants living in rooms that had been listed as vacant.

Like the rooms of most residents of the city's so-called single-room-occupancy hotels, space is at a premium.
Jake Poehls
Like the rooms of most residents of the city's so-called single-room-occupancy hotels, space is at a premium.
Ex-boxing coach Emmett Marcel Oliver says taxpayers and residents deserve better return on their money than they received during Mendoza's stint managing the Mission Hotel.
Jake Poehls
Ex-boxing coach Emmett Marcel Oliver says taxpayers and residents deserve better return on their money than they received during Mendoza's stint managing the Mission Hotel.

Such allegations point toward a possible theft of city taxpayer subsidies, which should trigger an investigation by City Attorney Dennis Herrera. When I asked Herrera's office whether THC had requested such an investigation, a spokeswoman explained the department's policy of neither confirming nor denying the existence of ongoing investigations.

Again, Mendoza himself denies the allegations. He and Gloria Hernandez say that after Mendoza left, Shaw authorized a housing division "shake-up" that involved firing Mendoza's superiors as well as employees who worked alongside him. Others resigned in connection with an internal inquiry into Mendoza's management of the Mission Hotel. People with direct knowledge of this situation, as well as city and nonprofit employees who worked with people who were fired in the shakeup, also said in interviews that allegations about Mendoza's supposed mismanagement led to at least six people recently leaving the organization through firings and resignations. Because these were confidential internal personnel matters at a private nonprofit, I was unable to ascertain precisely how many employees were compelled to leave THC in connection with the Mission Hotel shakeup.

Sources say Mendoza was also involved in loan sharking, in which tenants borrowed money at 1,200 percent interest and lived under the threat of violence in the event of late payments. "If a tenant borrowed $100, on payday he would pay back $100 more," said a source who worked alongside Mendoza, one of three people contacted independently of each other who claimed knowledge of this activity.

Mendoza insists this accusation is outrageous. He said that rather than victimize hotel residents, he went to great lengths to help them, sometimes buying them meals at a nearby restaurant. Again, he says, he has not been contacted directly by THC officials about allegations of criminal activity at the hotel.

Drug dealing is a potential problem in any facility housing people who were previously living on the street. Mendoza says that he did not tolerate it at the hotel, and that he was one of few building managers to have evicted tenants for drug dealing — an assertion confirmed by court records.

Sources with knowledge of the situation at the hotel, however, said drug dealers there were divided among those Mendoza protected, and those he did not.

"Basically we [had] an early warning system," said one source, who claims to have dealt drugs and lent money in the hotel. "The police have to call management before they enter the building. They call Carlos first, and before they come, he contacts me. I know I have to flush it down the toilet."

Sources said the hotel was also used for prostitution. "They were having open acts of prostitution in the hallways in exchange for drugs," said one of several residents who described this problem. "I felt uncomfortable and unsafe."

Mendoza denies all of this.

At the very least, a City Attorney investigation is necessary to determine whether rent-money skimming actually went on at the Mission Hotel, and, if so, whether THC promptly and fully reported this alleged theft of taxpayer subsidies.

What is more, descriptions of violence, drug dealing, prostitution, and a general atmosphere of menace at the Mission Hotel suggests San Francisco has reneged on the Care Not Cash promise of giving homeless people safe housing as an alternative to the violent, drug-ridden streets.

The aforementioned allegations emerged over three weeks as I interviewed San Francisco social service providers who helped place people in THC-run hotels. I interviewed people who worked alongside Mendoza for THC. I spoke several times over the course of two weeks with a man who claims to have been a former loan shark and dealer who worked with Mendoza. I interviewed a crack cocaine user who says he bought rocks from a dealer Mendoza protected. And I interviewed several hotel residents who claim they knew of drug dealing, loan sharking, rent skimming, and extortion involving Mendoza. And I spoke with Mendoza.

All of the hotel residents and THC workers I interviewed, except Oliver — who claims to have seen a crack cocaine transaction in which Mendoza passed rocks to a reputed dealer within the hotel — requested that their names not be used in this article.

That's because they report an atmosphere of fear surrounding the hotel, and around THC. If their names were to appear in print, these Mission Hotel residents, dealers, users, and former THC employees said they feared possible violence from Mendoza or his associates.

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