House Speaker Nancy Pelosi on Saturday called forVeritas, one of San Francisco’s biggest landlords, to return a $3.6 million Paycheck Protection Program loan that was intended to help small businesses cover expenses and retain workers during the coronavirus pandemic.
“PPP loans should be directed first and foremost to the small businesses with the greatest need, particularly minority, women and veteran-owned businesses that are struggling,” Pelosi said in a statement. “Larger companies like Veritas, one of San Francisco’s largest corporate real estate management firms, which has billions in assets and access to liquidity through other sources, were not the intended beneficiaries of PPP loans.”
Veritas Investments, which manages more than 250 San Francisco properties and has a $3 billion real estate portfolio, issued a statement on Sunday that said it plans to repay the loan within the two years allotted by the federal government.
“We are also a business that needed the loan for its intended purpose, to meet our payroll and employ the people responsible for maintaining the buildings that house more than 8,000 San Franciscans,” Veritas said in the statement. “We understand that some recipients of the loan are applying to make it a grant, however that is not our intention. We will not keep it.”
Companies can have loans forgiven if they spend the money on payroll, mortgage interest, rent and/or utilities in the eight weeks after they receive a loan. At least 75% must go to pay employees.
Veritas said the money will allow it to rehire 26 workers who were furloughed due to the coronavirus health crisis. The company had 196 employees prior to the health order. There are currently 170.
Tenants groups have repeatedly criticized Veritas for using strong-arm tactics to get longtime tenants with rent control to move out, including noisy, disruptive construction and “pass-through” charges, which allow landlords to jack up rent to cover improvements or maintenance.
“We recognize the challenges that all San Franciscans are facing during this time, and have worked hard to help our residents since before the shelter in place was implemented,” the Veritas statement said. “As COVID-19 emerged, we were the first manager to halt evictions, worked closely with the city to provide emergency housing for survivors of domestic violence and have worked hard to care for our residents. We will continue to develop additional programs for our residential and retail tenants, and will unveil more in the weeks to come.”
The company added that investors, not the company itself, own the buildings Veritas manages.
“Many assume we are a $3 billion business based on the value of the buildings we manage,” the statement said. “However, that is far from the truth.”
To qualify for a PPP loan a company must prove that the money is “necessary to support the ongoing operations of the applicant,” according to the Small Business Administration. Borrowers must take into account “their current business activity and their ability to access other sources of liquidity.”
The Treasury Department and the SBA, which jointly manage the PPP loan program, said Wednesday that the SBA would review all loans of more than $2 million.
Veritas does not plan to return its loan money, but other large companies, including Shake Shack and Ruth’s Chris Steak House, have returned PPP loans. More than 180 public companies have received over $670 million in PPP funds and Congress has authorized another $310 billion in funding for a second round.
“I join San Franciscans in calling on Veritas to return its PPP loan,” Pelosi said.