S.F. business could shut down due to crime, looming $2.5 million loan

But he’s facing financial ruin because he’s been unable to refinance a $2.5 million mortgage due in February. His building at 1069 Howard St. is scheduled to be auctioned on Jan. 24 “at a massive loss,” and he expects all his businesses will be forced to close. Antiques dating back to the 1800s, such as books and engraving plates, could be sold off in an estate auction, he said.

Sackett blames widespread drug use, violence and filthy streets in the neighborhood for his inability to address his loan. Since the pandemic, the area has fallen to the worst condition Sackett has ever experienced.

He said 30 lenders have declined to help him refinance. About six of them have said they “are not making commercial real estate loans in San Francisco due to the state of the city,” he said.

“It’s my pride and joy,” Sackett said of the building. “I’m out of runway here. I don’t know what to do.”

Next door is a drug sobering center that opened last year, and Sackett said people will smoke fentanyl at his building’s loading dock.

He said his staff used pepper spray on four people trying to break in, and last year, someone attacked him with a knife. A window is currently broken, and he will have to pay around $4,000 to replace it.

He said he’s tried to improve the area by commissioning a mural through a city grant and adding planters, but he and his two-person staff are constantly dealing with needles and feces.

Sackett said he hasn’t received any help from the city. “They don’t even return my calls,” he said. “They care about bike lanes, nonprofits, safe injection sites. … They have just ignored small business.”

“I’m just done with San Francisco and the bulls— here,” he said. “It’s out of control.”

“Mark and I share a lot of the same priorities, and I truly wish we could be making more progress sooner to turn things around in SoMa,” said Supervisor Matt Dorsey, who represents the district. “This is a neighborhood that was disproportionately impacted by COVID-19, especially in terms of the number of shelter-in-place hotels here, and the myriad public safety challenges attributable to open-air drug markets and public drug use. I’m optimistic that the neighborhood is beginning to see some progress. But for too many businesses like Mark’s, we’re just not recovering fast enough.”

Sackett said business is partially recovering, but relocating out of the historic building isn’t possible, given the importance of the space, he said.

He’s on track to make around $800,000 in revenue this year, compared to $1.2 million before the pandemic. But prospective clients have declined to book events because they think the neighborhood is too dangerous, Sackett said. He estimates that he’s lost almost $250,000 in revenue this year because of cancellations or clients declining to book events.

During last week’s Asia-Pacific Economic Cooperation summit, U.S. Secretary of Commerce Gina Raimondo had an event at the Box SF. But two other consulates, including the Japanese government, declined due to safety concerns and lack of parking, he said.

Rising interest rates and declining business have exacerbated the challenge for numerous property owners trying to repay mortgages. Some, including Westfield and Park Hotels & Resorts, have abandoned their properties after weak business.

Sackett bought the building for $1.575 million in 2004, property records show. He moved to the city in 1988 and also works in graphic design. The Box SF’s building was formerly the Hearst printing plant, where the San Francisco Examiner was printed. (Hearst later bought the Chronicle and sold the Examiner.)

Sackett said he has grappled with conflicts with the city over the years: Some of his businesses were found to have violated zoning laws, which had to be remedied. He said, in 2018, that overflowing sewage caused $85,000 in damage to his businesses, and he was only able to raise $10,000 through crowdfunding. Currently, he said he’s working to comply with the Americans with Disabilities Act.

“I can put a tent in front of someone’s front door and sleep … but the city comes after me for ADA compliance,” he said.

Sackett recalls that the nearby Federal Building was a hole in the ground and the InterContinental Hotel was just approved when he moved in.

Despite investment in SoMa, he said the street conditions severely deteriorated, starting in 2019.

Previously, there were a few homeless people and weed smokers. Since the pandemic, the area has been filled with open-air drug dealing, tents in the street and fentanyl use, he said.

“I’m trying to hold on,” he said. “I love my city.”

Reach Roland Li: roland.li@sfchronicle.com; Twitter: @rolandlisf