Fillmore Developer Who Owed City $5.5 Million to Pay Just $100,000

The city of San Francisco has reached a tentative settlement in a 2018 lawsuit against the developer of the Fillmore Heritage Center, the complex at 1330 Fillmore Street which once housed an iteration of the jazz nightclub Yoshi’s.

The city had sought to recover $5.5 million that was borrowed by Heritage Center developer Michael Johnson. The proposed settlement [PDF] requires Johnson to pay just $100,000, a fraction of the original loan.

The settlement, negotiated by the City Attorney’s office of David Chiu, would also bar Johnson from doing business with the city of San Francisco for five years. The Board of Supervisors is scheduled to vote on the settlement on Thursday, March 20.

“We believe the proposed settlement is the best outcome for the city,” said Jen Kwart, spokesperson for the City Attorney’s office, “and we are pleased the defendants and their affiliated businesses have agreed not to do business with the city for five years.”

The city had hoped the Heritage Center would revive the Fillmore neighborhood, once known as the “Harlem of the West” for its bustling corridor of Black-owned jazz clubs, restaurants and businesses. (The neighborhood was decimated and its population was displaced by San Francisco’s Redevelopment Agency, led by director Justin Herman, in the 1960s.)

Johnson and his partners in the Fillmore Heritage Center declared bankruptcy in 2014. He soon afterward pursued a new development near Lake Merritt involving land owned by the city of Oakland.

Johnson, who countersued the city in 2018 for breach of contract, had additionally owed $4.8 million in loans from the Redevelopment Agency. That debt, like many others in the wake of the dissolution of California’s redevelopment agencies in 2011, was written off.

Johnson also owed smaller debts. In 2015, the jazz musician Christian McBride contacted KQED about a $9,300 check from Johnson that had bounced after his residency at The Addition, the Heritage Center’s short-lived reincarnation of Yoshi’s. Days after an inquiry from KQED to Johnson about the bounced check, McBride was suddenly paid the full amount.