The historic Payne mansion at 1409 Sutter St. in San Francisco is back on the market, roughly six months after its owners won city approval to convert the property into a boutique hotel and restaurant.
The owners behind the planned hotel in lower Pacific Heights invested some $3 million in the property over two years, but it never opened for business, said Anton Qiu, a principal with TRI Commercial in San Francisco who is representing them.
The owners, who went by the business name Yorbarn USA Corp., are a family with children who were originally from China and decided to move from San Mateo back to Asia, Qiu said. Their business operated other boutique hotels in China, including the luxury Leader Hotel in Huan; the property at 1409 Sutter was to be Leader House, their first in the United States, but it never opened for business.
The home featuring elements of Victorian and Queen Anne style was constructed in 1881. (Click on the photo for a slideshow of the interior). The property was built for Theodore F. Payne, the son of a businessman and property owner who arrived in San Francisco in 1849. Payne’s wife was the niece to a silver tycoon.
The property was designed by noted architect William Curlett and survived the 1906 earthquake and fire. It was added in 1980 to the National Register of Historic Places, preserving its mostly intact exterior.
That designation doesn’t apply to the interior, though, and 1409 Sutter has changed a lot over the years, serving not only as a modern home of its day (with plumbing, and indoor toilets) but also as a corporate office, art gallery, YMCA and alcoholism treatment center. Offered for sale in 2011 at $7.9 million, it had most recently been a private club.
Yorbarn acquired it in 2012 and proposed converting it to a 10-room luxury boutique hotel with an authentic Chinese restaurant on the first two floors. The city Planning Commission approved the proposal in November, and the assessor’s office lists it with an assessed value of $3.1 million for land and $1.3 million for improvements.
Now it’s on the market for an asking sale price of $13,950,000 — about $825 per square foot for nearly 17,000 square feet on four floors with six parking spots in back – or leasable for a triple-net asking rate of $45,000 per month. That asking sale price is roughly twice what the sellers were seeking back in 2011.
The site has “extremely flexible zoning,” Qiu said, which lets a buyer (perhaps a tech billionaire who loves urban living) convert it back to single-family use, or allows commercial use for a single user, group housing or many other uses. It’s just off the Van Ness corridor, next door to the Spanish consulate and close to the new California Pacific Medical Center hospital site.
Qiu has received a lot of interest in tours and information, but has no firm date to consider offers. “This is a unique property so we want to make sure we market it thoroughly,” he said. “It’s going to take somebody who’s going to appreciate the history.”
But a buyer who appreciates the history might not appreciate some of the changes that were made in converting the property for hospitality, said Bonnie Spindler, an agent with Zephyr Real Estate who specializes in Victorian-style homes, including mansions.
While the woodwork and exterior appearance was preserved, she noted, the newly expanded commercial kitchens and the marble surfaces and other changes made in the guest rooms are a very different style than would be typical in a San Francisco Victorian. “Depending on who they sell it to, they might have to do a lot of work to it” to return the mansion to something resembling its original interior style, Spindler said.