- Residents of a private street in San Francisco were outraged after one couple scooped up their cul-de-sac in an online auction and tried to sell it back to them for nearly $US1 million.
- City leaders are now moving to rescind the sale.
In 2015, the City of San Francisco put the parcel up for sale after the homeowners’ association failed to pay property taxes on the street for more than a decade. Lam and her husband, Michael Cheng, paid $US90,000 in an online auction to become the proud owners of the street, the footpaths, and the well-manicured shrubbery around the 35 mega-mansions on Presidio Terrace. On Monday, the couple offered to sell it all back to residents for nearly $US1 million.
Now, city leaders are moving to rescind the sale. On November 28, the San Francisco Board of Supervisors determined that the city’s tax collector did not make a reasonable effort to notify residents of the unpaid tax bill before awarding their street to the highest bidder – and voted to reverse the sale. Lam and Cheng will be reimbursed their $US90,000.
For at least 17 years, the city’s Office of the Treasurer and Tax Collector mailed tax forms to the address of a now deceased bookkeeper, who worked for the homeowners’ association before retiring in the 1980s. Over the years, the $US14 annual property tax went unpaid by the people who live on Presidio Terrace. (San Francisco taxes the private street as a separate parcel from the homes on it.) The bill racked up hundreds more dollars in penalties and interest.
Presidio Terrace, along with 1,400 other parcels (mostly vacant lots), hit the auction block in 2015. The tax collector’s office sent advanced notice to the same outdated address, which was later returned to sender and marked as undeliverable, according to José Cisneros, treasurer of the city and county of San Francisco. Still, the sale went on.
Residents were furious about the sale
Sunny Lee, whose house on Presidio Terrace has passed through three generations of her family, said before the Board of Supervisors on Tuesday that she was in “utter disbelief” that her street could be “taken out from under us” after the tax collector’s office saw that its attempts to notify residents of the unpaid tax bill and of the sale failed to reach them.
Carol Shearer and her husband purchased a home on Presidio Terrace two years ago and have been living in Boston while the house is being renovated. She described her shock when she learned from the news “that our new community has this bizarre condition” that she said “threatens the safety and quiet environment” of her real-estate investment.
Residents came in droves to express their outrage. Most who spoke, including Carrie Weintraub, president of the homeowners’ association, accepted some responsibility for not updating the group’s address with the tax collector’s office. But they argued the city did not perform the due-process required before selling land they thought they owned.
Presidio Terrace isn’t open to the public. A stone wall circles most of the development, and a private security guard stands watch at the entrance. The street’s enhanced security and isolated location at the top of the peninsula has attracted some of the wealthiest and most powerful politicians in California over the years, including Sen. Diane Feinstein and House Minority Leader Nancy Pelosi. A homeowners’ association has reigned over the street since 1905.
Though they may be well-connected, the residents of Presidio Terrace were not made aware of their street’s sale until May, when a title-search company working on behalf of Cheng and Lam contacted the homeowners’ association to see if it was interested in buying back the parcel. Cheng has since said that was done in “error.” A few months later, the couple revealed plans to charge rent on street parking spots in a buzzy interview with the San Francisco Chronicle.
Supervisor Mark Farrell, who represents the district, urged the board to reverse the sale on Tuesday. He criticised the out-of-town investors for wanting to turn a profit on homeowners who simply didn’t know they owed tax on their street. According to Farrell, Lam and Cheng offered to sell the street back for $US950,000 on the day before the hearing.
Lam, a first-generation immigrant who was born in Hong Kong, said her intent was never to make money off the ultra-rich residents of Presidio Terrace.
“I’m an engineer with a simple dream of owning a piece of San Francisco,” Lam said before the San Francisco Board of Supervisors. “I’m not rich enough to live on that street, but I like to think that by owning it, I’m a San Franciscan in spirit.”
Critics say the rich will get their way in San Francisco
The homeowners’ association’s fight to win their street back has sparked interest far beyond Presidio Terrace. Critics, including citizens who appeared at the Board of Supervisors hearing in support of Lam and Cheng, have argued that city leaders would not devote the same attention to the sale had the street been located in a less pricey zip code.
“No one, regardless of who they are, should be deprived of their property without due process of the law,” said Scott Emblidge, an attorney representing the homeowners’ association.
The Board of Supervisors voted 7-4 to reverse the sale of Presidio Terrace, which prompted residents watching the hearing from an overflow room at City Hall to cheer. But the fate of Presidio Terrace remains hazy. Lam and Cheng told TIME ahead of the hearing that they planned to pursue ownership through the courts if the sale was rescinded.
Shepard Kopp, attorney for the buyers, expressed his disappointment with the outcome.
“Sadly, the seven members of the board who voted to rescind this sale have demonstrated that you get a different standard of government in San Francisco if you are rich and politically connected,” he wrote in a statement.
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