Once upon a time, before the invention of smart phones and tablets and electronic games, Monopoly was one of the best games – ever. Perhaps it was the only game to educate kids (and even adults) about financial freedom and savvy investment. The ultimate objective is to become the richest player – by owning as much land (property) as possible.
If a player lands on an un-owned property, he or she may buy it for the price listed on that property’s space. If he or she agrees to buy it, he or she pays the “Bank” the amount shown on the property space and receives the deed for that property. If other player lands on that property, voila, he or she pays rent to that person, as specified on the property’s deed.
And that’s precisely what a South Bay couple in San Francisco did. Michael Cheng and Tina Lam have nobody to thank but themselves for being street and financial smart. An auction sale caught their eyes and the couple quickly snatched up – Presidio Terrace – a gated, privately owned street with a distinctive circular shape in the neighbourhood of the same name.
Turns out, Presidio Terrace is the jewel in the crown because 35 multimillion-dollar mansions sit on the street. It is home to some of San Francisco’s most expensive and exclusive place. Michael and Tina bought the exclusive street for merely US$90,100; outlasted 73 other bidders, and now plan to charge those millionaires for parking on their own private street.
Former homeowners in the exclusive area included House Democratic leader Nancy Pelosi; Senator Dianne Feinstein and her financier husband, Richard Blum; and the late Mayor Joseph Alioto. It was precisely like taking a page from the Monopoly game, but the residents aren’t impressed at all. In fact, it’s an understatement to say the rich but ignorant residents are upset. They’re furious!
Besides a guard being stationed round the clock at the stone-gate entrance, the private residential area also includes a string of well-coiffed garden islands, palm trees and other greenery that enhance the gated and guarded community at the end of Washington Street, just off Arguello Boulevard and down the hill from the Presidio.
Apparently, the Presidio Terrace Association neglected to pay taxes – US$14 per year – on its private pavement for some 30 years. A failure to recover US$994 in unpaid back taxes, penalties and interest had forced the City Hall with no other option but putting the street – inclusive of the actual street and sidewalks – up for auction in 2015.
The ignorant super rich Presidio Terrace residents weren’t aware of the auction sale, or the tax bill – until earlier this year. And now the mansion owners are crying foul and want the Board of Supervisors to reverse the sale, as if it never happened. The Presidio Terrace Association has filed lawsuits against their new landlords, Tina Lam and Michael Cheng, in July and even the City Hall.
The panicked homeowners of the exclusive neighbourhood, has engaged Scott Emblidge, an attorney for the Presidio Homeowners Association to fix the problem. The lawyer wrote to the City Hall with a lame excuse – the group had failed to pay up because its tax bill was being mailed to the Kearny Street address used by an accountant who hadn’t worked for the homeowners since the 1980s.
The homeowners association is fighting an uphill battle though. City Hall spokeswoman Amanda Fried said – “There is nothing that our office can do.Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time – and they keep their mailing address up to date.”
Fried said that as far as she knows, the Board of Supervisors “has never done a hearing of rescission”. The fact that it’s been more than two years since Cheng and Lam bought the property makes it even tougher to overturn the sale now. Rubbing salt into injury, Treasurer-Tax Collector Jose Cisneros’ office says the city did what the law requires.
One of the mansion owners said – “I was shocked to learn this could happen, and am deeply troubled that anyone would choose to take advantage of the situation and buy our street and sidewalks.” They actually didn’t know that their street and sidewalks had been sold until they were contacted on May 30 by a title search company working on behalf of Cheng and Lam.
The couple of Cheng and Lam, who noticed plenty of financial opportunity, have been quietly sitting on the property since their purchase in April 2015. Despite controlling 120 parking spaces on the street, Mr. Cheng, a real estate investor, humbly said – “We just got lucky.” He reveals that they are looking to get title insurance to make their newly found asset more marketable.
At the same time, the couple are talking to land-use experts to see what their options are for the property. Cheng said – “We could charge a reasonable renton it.” Of course, they can also sell the street to the highest bidder now that the whole world knows how valuable the street is. Prior to a 1948 U.S. Supreme Court, homes in Presidio Terrace could be purchased only by whites.
But the homeowners association, in their lawsuits, is seeking to block the couple from selling the street to anyone while the city appeal is pending. The residents claim that the plan by Cheng and Lam to charge them for parking is nothing but a threat or tactic to force the homeowners association to shell out big bucks to buy back the street.
However, the couple said they’re in no hurry to sell. Tina Lam, an engineer in Silicon Valley who was born in Hong Kong and came to the U.S. for college, said – “I’m a first-generation immigrant, and the first time I came to San Francisco I fell in love with the city. I really just wanted to own something in San Francisco because of my affinity for the city.”
Taiwan-born Cheng revealed how they saw a description of “this odd property in a great location” while looking at parcels being auctioned online by San Francisco’s tax office back in 2015. He said they took a chance with the auction describing – “Part of Pacific Heights, the right location, land in a good neighbourhood.”
The prestigious Presidio Terrace saw one property asking for US$16.9 million last year. The financial savvy Chinese couple could easily charge US$120 per parking spot every month for each of the 35 mega-mansion owners and recoup their investment of US$90,100 in 2 years. But considering they have 120 parking spaces, they could charge the same amount – and make US$172,800 in 1 year.
Obviously, Cheng and Lam had deliberately waited for over 2 years to approach the homeowners’ group. It was a brilliant strategy so that the property sale (Presidio Terrace) would be more difficult to rescind or reverse. Amusingly, the residents, obviously extremely frustrated, said the City Hall should have had posted a notice in Presidio Terrace about the sale of their street.