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by Emily Landes

For Bob Mayer, the potential for improvement at 1515 Greenwich Street began at the very bottom. When he bought the 35-unit apartment building, it had an underutilized basement, which held only a small laundry room and a large crawlspace. The ground-level courtyard was unattractive and provided no real outdoor amenity to the tenants. The entryway was covered by a dark canopy and the original 1906 trim had been chopped off, with incongruous wood siding added.
Where many people would have seen an ugly duckling, Mayer envisioned a swan. “I could see that I could restore it to its original look and feel and make it into a high-end building,” he comments.

That was in 2005. Now, four years later, Mayer has finally wrapped up the last of his extensive renovations. On the surface, the building has the turn-of-the-century charm that San Francisco renters love, but it also uses the latest high-tech infrastructure to generate energy savings its coal-burning creators never could have imagined.

Basement Beginnings
The first piece in the renovation was turning the basement into a 22-spot parking garage that would also house most of the mechanics for a new water submetering system. This change allowed Mayer to offer a coveted amenity to his tenants (at an additional $300 a month per spot), while also shifting the burden of paying for utilities off of his shoulders. Mayer was able to use his architecture background to make his own drawings of the new garage, which meant sketching out every single joist in the building. Luckily, he discovered that all the joists ran the same direction, so he could easily run his updated plumbing and metering system in the joist cavities. Unluckily, he also discovered that the building was only braced in one direction—disastrous in the event of a major earthquake.

Rather than being put-off by the additional safety systems that would need to be installed, Mayer took it as an opportunity to incorporate important seismic upgrades into his overall design. “When you’re doing a project like this, which is very expensive and complicated, you have to try to get as much benefit as you can to spread the cost out,” he explains. So, as he excavated the area in order to take the grade level down three feet (a process that took about a year and 70 trucks worth of dirt removal), a new foundation and basement column and beam system were constructed. This system consists of 16 moment frames of steel members that work in both directions to stabilize the building. (Moment frames are very stiff connections that resist twisting and bending in the connection and transfer stress to the beams and columns, as these are less likely to fail.)

He also extended the building into the adjoining courtyard so that he could put in an enlarged laundry room, doubling the number of washers and driers and adding a pick-up/drop-off dry-cleaning service. On top of this new space, he constructed a shared deck for his first-floor residents. Other upgrades included a new fire alarm and sprinkler system, as well as adding gas to 14 apartments that had been purely electric since a fire in the 1950s. “They thought electric was ‘modern,’” Mayer says of the owners at the time.

Of course, the most unique change is that Mayer’s renters now pay for their own utility use. That shift comes courtesy of the new submetering system, which Mayer believes is the only one of its kind in San Francisco, although he says it’s a lot more common in apartment buildings outside of California. In fact, Mayer had to go to a Utah company called Conservice to find the meters, which work in conjunction with a new “on demand” water delivery system, replacing the previous “continuously circulating” system.

The bathrooms and kitchens are separated in the apartments, and served with water from separate pipes. Therefore, the submetering had to occur in the newly excavated basement upstream of the branch-off. The submeters are connected to a wireless transmitter that records flow volume and generates an invoice based on that and the proportional cost of the gas to heat each tenant’s share of the hot water. (Each unit is also responsible for 1/35 of the garbage bill.) Also, occupancy sensors were placed in inconspicuous areas of the kitchen and bathroom, and when a resident enters these rooms, a pump pushes hot water to the tap within 30 seconds, so hot water is always quickly available, even though it is not in constant circulation.

Other green upgrades have been made outside of the plumbing system. Units are equipped with electronic ignition gas heaters, rather than wasteful pilot lights. Every unit has compact fluorescent lighting, instead of inefficient incandescent bulbs. Formerly empty wall and ceiling cavities have been filled with insulation that not only stops heat from wafting out, but sound as well. Finally, drafty single-pane windows were replaced with double-pane low-emittance windows, which also help maintain the desired temperatures in the units.

Through the combination of on-demand hot water delivery, tenant responsibility
for utility use and energy-efficient upgrades, Mayer says that each unit only pays about $50 for sewer, water and garbage use, and $15 to PG&E. Because of these low figures, he has not received a single complaint from tenants about having to pay for their own utilities.

A Very Lucky Landlord
Of course, the above-mentioned in-unit upgrades can only be made in apartments that are vacated by the former tenants. This is one area where Mayer really lucked out. While he expected a certain amount of turnover when he bought the building, he was pleasantly surprised when 29 of his 35 units became vacant during the course of the project. “I don’t know what happened, but I ended up having stacks of apartments all vacant at the same time—in a rent controlled building,” he says. One of those recently vacated units had been occupied by the same tenant since 1958 and another since 1961. By complete coincidence, each moved out to be closer to their families within weeks of the other. Even though
the majority of departing renters had kept the units in good shape, they still needed complete overhauls—not only to add energy-saving features, but also the
upgraded appliances, granite countertops and tile bathrooms that today’s high-end tenant expects.

“I didn’t expect all these apartments to be vacant, and I kept taking advantage of the opportunities,” Mayer crows. “It doesn’t bother me any more to open up these apartments because I know what to expect: the plumbing stinks; it needs insulation; it needs windows; it needs sheet rock; it needs repairs and floor refinishing and new cabinets in the kitchen. If you get an apartment that rented at $700 a month and you spend some money on it and it rents out
at $1,500 a month, that’s almost ten grand a year.”

And Mayer’s luck didn’t stop there. He had wanted to upgrade the building’s ancient elevator, but thought it would be impossible because a modernized elevator shaft would need to be wider, and thus cut into five different apartments, only one of which was empty. Once again, fate was working in his favor. Within two weeks he received notices from the four other elevator-adjacent tenants; some were starting new jobs, others beginning a family—all were moving out.
Mayer not only got to add his wider elevator, but he also decided to bring it up to his new roof deck, an incredible added amenity that provides his residents with a place to socialize amid city views. It’s no wonder that Mayer has had little trouble renting out his newly renovated units, even in a down rental market. He believes part of the reason his units go so fast is that they are smaller (21 of the 35 are studios), something he believes tenants are searching for in these uncertain economic times.

“People are value shopping today. They don’t want one bedrooms for $2,000. They want studios that are nice in a good location for the cheapest price,” he says, adding, “I don’t cut my price. I spent a fortune. If you want a crappy old apartment, go get it. It’s okay with me. The tenants kind of respect that. I treat them like customers, not adversaries.”

It is that old adversarial landlord-tenant relationship that Mayer believes is stopping more owners from making the same kinds of green upgrades that he has: “There isn’t a single person in San Francisco who isn’t an environmentalist, and people who support rent control consider themselves to be much more environmental than some ‘greedy’ landlord like me. Well, imagine that you have a building that doesn’t have turnover and you want to put the kinds of improvements in that I have, which have cut the energy use about 75%. You’d have to go into people’s apartments, and you’d have to pay relocation fees while you’re doing the work. Then they get to move back in at the same low rent. And you have to pay for all of these improvements upfront, and then you have to go to the city and explain why you did these things and hope you get some kind of passthrough. Who is going to do that when you’re still paying the electric and water and they’re paying the same old rent? Nobody’s going to do it. It’s absurd.”

Onward and Upward
Through a combination of insight and luck, plus a commitment to instituting seismic upgrades and energy efficient systems, Mayer has created an incredible asset to add to his portfolio. Although he says he always has his eye out for opportunities, the owner of three multifamily properties is in no rush to move on to the next fixer. “If there was a really good deal out there, I’d go for it,” he says. “But I think the market’s correcting and I don’t want to buy until things have settled down a little bit and we have a better sense of what’s going to happen with rents.”

So, with one project ended and no new buildings on the horizon, what’s Mayer to do with all his recently freed up time? Well, build an airplane, of course.
This summer he’ll be heading to Florida to do just that with his 20-year-old son. Despite not knowing the first thing about how to construct a plane, he hopes (with the help of a Florida company) to get the frame finished in about six weeks. He expects the entire project to take several years to complete and many thousands of dollars, but after starting at the bottom of 1515 Greenwich, factors as simple as time and money are not going to stop him from taking flight. “An airplane’s a hell of a lot cheaper than a building,” he laughs. “It may not seem like it, but it is.”

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The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Emily Landes is the managing editor of SF Apartment Magazine. Copyright © 2009 by Black Point Press. All rights reserved.