Mayor, supervisors OKd auction of pricey street
It wasn’t just the San Francisco tax collector who put the exclusive Presidio Terrace’s street and sidewalks on the auction block — the mayor and Board of Supervisors signed off on the sale for back taxes as well.
According to City Hall records, the private oval street, sidewalks and other common areas were one of 550 properties approved for tax default sale in a unanimous vote by the supervisors on Feb. 11, 2015. Mayor Ed Lee signed off on all the sales less than a month later.
The Presidio Terrace Association says the tax collector’s office sent the homeowners’ $14 annual property tax bill to the wrong address
for 30 years, and that someone should have called them before putting the street up for auction. Instead, it was snapped up for $90,100 by Tina Lam and her husband, Michael Cheng, of San Jose in an online auction in April 2015.
The homeowners are asking the Board of Supervisors to rescind the sale, and board President London Breed says it’s worth taking a look at.
“It makes no difference if it is a wealthy community or a poor one — we need to investigate and get to the bottom of what happened,” Breed said. They won’t have to look far. The supervisors can go right to Page 12 of the 19-page list of properties that the board approved for tax auction in February 2015. Near the bottom was the one owned by the Presidio Terrace Association and the minimum bid, $1,054.24.
Whether anyone on the board — including Supervisor Mark Farrell, whose district includes Presidio Terrace — actually read the tax sale list is another question.
Farrell did not return our calls seeking comment.
Default tax sales are routine matters with counties and usually are part of the supervisors’ consent calendar — a section of the agenda that is rarely read with any scrutiny by board members, or by the mayor.
Lee declined to comment on his having signed off on the sale, but spokeswoman Deirdre Hussey said, “This is an issue for the office of the treasurer and tax collector to sort out with all parties involved. The mayor is focused on running the city and on the pressing issues that impact all San Franciscans such as homelessness, housing and reducing harm on our streets.”
In fact, no one paid any attention to the sale until May when, through an intermediary, Lam and Cheng approached the Presidio Terrace homeowners asking if they wanted to buy back their street.
They never got around to discussing a price. Instead, the homeowners responded by suing the city for alleged lack of due process, saying they were never properly notified and asking the Board of Supervisors to rescind the sale.
The suit also asks that the couple be barred from selling the street to anyone else, because that would legally kill any chance that the Board of Supervisors could undo the deal.
One of the homeowners’ key claims is that the city was sending their tax bills to the Kearny Street address of their accountant who had retired in the early 1980s. They say the city knew it was an invalid address and that someone should have contacted them personally.
The tax collector’s office has said it’s the property owners’ responsibility to provide the correct mailing address for tax bills and that the sale was valid.
The real estate lawyers we spoke with said it appears that the tax collector is on solid legal ground, and that the best bet for the homeowners would be to ask the Board of Supervisors to overturn the sale without going to court.
Some might think that given the choice between siding with 35 wealthy and influential San Francisco homeowners or a pair of real estate speculators from San Jose, the board would choose the locals. But judging from the feedback we’ve received to our coverage — and the splash it’s made as far away as England and Asia — Lam and Cheng have a lot of allies who see them as savvy underdogs.
There’s another potential wrinkle here: Under state law, rescinding the sale will require “the written consent” of City Attorney Dennis Herrera.
“We will play the same role we play in any kind of adjudication before the board,” said Herrera spokesman John Coté. “We provide them with legal advice, and the board makes the determination.”
In other words, Herrera will simply make sure that whatever the board decides is legally defensible.
And with good reason, because the board’s decision could send the city into uncharted legal waters — and more lawsuits.
The first hearing is on Sept. 5, when the supervisors will begin deciding whether they even want to take up the matter.
There is also the sticky question of how such a prime piece of real estate, surrounded by so much wealth, was last assessed in 1985 at only $224 — a figure that current Assessor Carmen Chu said is “super low.”
“Like I said, we need to investigate,” Breed said of the sale. “If something wrong happened, we need to correct it. If it was done correctly, then it is what it is.”
Put it together, and you have the clock ticking for a “reasonable” settlement that gets everyone off the hot seat. The only question is how each side defines “reasonable.” San Francisco Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or email matierandross @sfchronicle.com. Twitter: @matierandross