Wealthy San Francisco neighbors sue couple who bought their street (update)

Presidio Terrace is a gated, privately owned street with a distinctive circular shape in the neighborhood of the same name, home to some of San Francisco’s most expensive and exclusive abodes.

But little did its tony residents realize the city sold the entire thing out from under them two years ago.

That’s the story as the San Francisco Chronicle tells it: Turns out the Presidio Terrace Association neglected to pay taxes on its private pavement for some 30 years. So City Hall put the street—that is, the actual street and sidewalks—up for auction in 2015.

The winning bid from an investor/engineer South Bay couple came to just over $90,000—barely enough to buy the front door of any of the multimillion-dollar homes in the neighborhood, but also almost a hundred times the sum of the delinquent taxes.

It seems that Presidio Terrace neighbors weren’t aware of the auction, the sale, or the tax bill until earlier this year. And the street fee that they failed to pay for all of those years? Less than $14 annually.

Screen grab via Google Streep Map

Amazingly, all of this really did happen, at least according to the lawsuit that the Presidio Terrace Association filed against their new landlords, Tina Lam and Michael Cheng, in July.

In the complaint, homeowners note that the association has owned and maintained the O-shaped avenue since 1905. So why’d they drop the ball paying the tax man? According to the suit:

“The Association has not paid those taxes because the City has been sending the property tax bills to the Association at the following address: 47 Kearny Street. [...] Which is not the address of the association or any member.

“After research, the Association is informed and believes that this address was associated with an accountant who last performed work for the Association in the 1980s. [...No] member of the Association was aware that property taxes has not been paid.”

The Kearny Street address belongs to the property management company Hanford Freund. Nobody at HF was immediately available for comment.

Update: HF’s Senior Vice President Timothy Falvey told Curbed SF that his company never dealt with the Presidio Terrace Association, in spite of the cited address.

“Handford Freund has never managed the Presidio Homeowners Association or whatever it may be named. I’ve been there for almost 30 years and never heard any reference to it or seen anything in our files about it, and I’m confident that my firm has never managed it. [...] We have nothing to do with it.”

The suit further claims that the city “made no reasonable effort to inform the Association or any of its members that the Common Area was subject to sale” and that no one on the street found out about it until May 30 of this year.

Photo by Rocor

Neighbors hope the court will rescind the 2015 sale and return ownership to them. Meanwhile, a spokesperson for the city’s Treasurer-Tax Collector told the Chronicle’s Matier and Ross that the office did everything required under the law and that everyone else in the city manages to keep their property taxes straight.

The neighbors have also petitioned the Board of Supervisors to reverse the sale, with a hearing set for October.

In the meantime, the street’s new owners are considering instituting a parking fee in the neighborhood. But if neighborhood residents aren’t keen on paying a parking fee, that’s no problem for the street’s new owners.

Matier and Ross note: “[I]f the Presidio Terrace residents aren't interested in paying for parking privileges, perhaps some of their neighbors outside the gates—in a city where parking is at a premium—would be."

• Rich SF Residents Get a Shock [San Francisco Chronicle]
• Presidio Terrace v Lam [SF Superior Court]
• Home In Gated, Super-Exclusive Presidio Terrace Asks $16.9 Million [Curbed SF]
• Home on Super-Exclusive, Gated Presidio Terrace Wants $6.5M [Curbed SF]
• Presidio Terrace: A brief guide to San Francisco’s most exclusive cul-de-sac [Curbed SF]