Editor’s Note: The crime statistics in this story have been corrected to accurately reflect the city’s uptick in crime in the past year.
SAN FRANCISCO (NewsNation) — The owner of two of San Francisco’s largest downtown hotels announced it would cease paying the loans and go into foreclosure on the properties, stating that the city faces “major challenges.”
Park Hotels & Resorts said Monday that it will stop payment on a $725 million loan secured by the two hotels, the Hilton San Francisco Union Square and Parc 55.
It comes as many residents and businesses are leaving the city, citing several reasons, including crime.
Thomas J. Baltimore, Jr., CEO of Parks Hotels & Resorts, said the decision was “very difficult, but necessary.” In a statement, he noted: “record high vacancy; concerns over street conditions; lower return to office than peer cities.”
When comparing crime rates from last year, motor vehicle thefts are up by almost 6%, robbery is up by 17% and homicides are up by 5%, according to the San Francisco Police Department.
The announcement also comes a week after the San Francisco Travel Association announced it will spend more than $6 million to attract tourists back to the city by launching a new ad campaign.
“Always San Francisco” is by far the largest global marketing campaign the city has done. The campaign targets leisure travelers and meeting planners in major domestic and international markets by showcasing the city’s lively and unique neighborhoods as well as iconic landmarks such as the Golden Gate Bridge and Lombard Street.
The campaign will appear in ad markets that include New York City, Boston, Chicago, Washington and Houston. The city’s tourism industry is steadily recovering. The San Francisco Travel Association has forecasted that 23.9 million visitors will be arriving in 2023.
NewsNation affiliate KXAN contributed to this report.