Everyone knows that the price of a San Francisco home can easily go into upwards of a million dollars, and it's been a high priced community for many years.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Presidio Terrace in San Francisco. A street w/multi-million dollar mansions sold for $90k at auction. Residents never knew. <a href="https://twitter.com/hashtag/ABC7now?src=hash">#ABC7now</a> <a href="https://t.co/k8Jz9FNwwv">pic.twitter.com/k8Jz9FNwwv</a></p>— Wayne Freedman (@WayneFreedman) <a href="https://twitter.com/WayneFreedman/status/894664754614095872">August 7, 2017</a></blockquote>
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However thanks to a flawed system and a clever attitude, one savvy local investor has purchased an entire street in the city's most exclusive of neighborhoods for the shockingly low price of just $90,000.
That's only the beginning of the controversy, however, as some of the extremely rich residents of the Presidio Terrace neighborhood weren't even made aware their street was up for sale, to begin with, and they are absolutely livid it has been sold without their consultation from the city.
Presidio Terrace is an oval shaped cul-de-sac which is sealed off by a gate from the bordering Presidio Heights neighborhood
It's an extravagant community, which is filled with decorative palm trees and multimillion dollar mansions. Within its own boundaries, the street itself has been home to high profile residents including Senator Dianne Feinstein, and House Democratic Leader Nancy Pelosi.
However thanks to a secretive city auction resulting from an unpaid tax bill, it's now home to Bay Area real estate investor Michael Cheng and his wife Tina Lam; who together bought the street and now own the sidewalks that the residents walk on, literally.
Parts of the development including the "common ground", the streets, and yes, even the streetlights, are now Mr. Cheng’s private property.
Up until the auction, however, all of that property has been managed by the Homeowners Association, which controlled the area since at least 1905.
"I thought they would reach out to us and invite us in as new neighbors," Cheng said. "This has certainly blown up a lot more than we expected."
It turns out however that the Homeowners Association for Presidio Terrace failed to pay a meager $14 a year property tax, something that owners of all 181 private streets in San Francisco must do, and as a result of the careless mistake and stupidity had dire consequences.
San Francisco apparently took matters into their own hands, and the city's tax office put the property up for sale at the cost of $994 in an online auction to regain their unpaid back taxes, along with the penalties and interest.
During a public auction, which happened without telling each individual resident one by one, billionaire investors met in a tiny auction room back in April of 2015 where the Cheng’s eventually walked away with the rights to the street with a $90,100 bid.
Scott Emblidge, who is a public attorney for the Presidio Homeowners Association, said in an open letter to the city that the owners failed to pay because the tax bill was mistakenly being sent to the address of an accountant who wasn't employed by the Homeowners Association since the 1980s.
It's completely preposterous to think that a tiny bill of less than $1000 cost the rights to the street from being handled by the organization.
This leads many in the community to believe this was an intentional approach by someone in the city tied to the billionaire investors to allow this loophole to occur and sell their streets.
The median income for each home in the neighborhood is well over a million dollars a year, so it's clearly an insult to the intelligence of those who live there to suggest that pocket change allowed this to happen.
Emblidge said the residents didn't know their street was put on the auction block at all, let alone sold, until May of 2017 when a title search company hired by Cheng and Lam reached out to ask if any residents had an interest in buying back the property from their investment team.
That was one of several of the options Cheng and Lam have considered for making the investment pay off, in order to now charge the residents of the neighborhood in excess of millions of dollars for what they paid less than a hundred thousand for.
While it's clearly a smart business maneuver, it definitely seems like this may have been the play from the beginning to many of the outraged citizens.
Another option is to charge residents to park on their own street, seriously. Cheng’s firm considered renting out the 120 total parking spaces that line the grand circular road where the residents have lived for many years.
"As legal owners of this property, we have a lot of options," Cheng said, adding that nothing has been decided. The matter could be headed for nasty court battle.
Just this past month, the homeowners petitioned the Board of Supervisors for a hearing to rescind the tax sale which occurred without their knowledge.
The board has scheduled a hearing for October of 2017, but as if now Cheng still technically owns the street, and can do with it whatever he pleases. If he wants to tear up the road completely, he can and there isn't anything the people who own houses in the neighborhood can do to stop him.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Wealthy San Francisco gated community doesn't pay taxes, gets its street sold at an auction.<a href="https://t.co/BgagyAvABg">https://t.co/BgagyAvABg</a></p>— MarketWatch (@MarketWatch) <a href="https://twitter.com/MarketWatch/status/894736350649430016">August 8, 2017</a></blockquote>
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The Homeowners Association has also sued the couple and the city, seeking to block Cheng and Lam from selling the street to anyone while the city appeal is pending, and they've decided they're going to fight back.
Source:
http://globalnews.ca/news/3653729/presidio-terrace-street-sold/
