City takes stock of its real estate

60 lots identified for possible sale
By Brooke Williams
UNION-TRIBUNE STAFF WRITER

January 14, 2007

San Diego's real estate division is cleaning house, hoping to make millions on land that has languished for decades.

It has started pulling a list of property from its massive portfolio that could be considered surplus and giving public entities first dibs. The city, squeezed for cash by a crumbling infrastructure and billion-dollar pension deficit, hopes to put land on the market by June.

For families who live next door to city lots that have become neighborhood dumps and fire hazards, the sales could be a godsend. But hundreds of families who rent land on the list wonder what will happen to them if the properties change hands.

In the 5-year map to fiscal health that he outlined last fall, Mayor Jerry Sanders proposed selling land and signing new leases to make $102.5 million by 2012. The plan estimates land sales and new leases will bring in $15.3 million in fiscal 2008 and $21.8 million in the following four years.

The real estate department has been examining the city's properties lot-by-lot for several months, as part of a review that began after The San Diego Union-Tribune reported that the city did not have an accurate inventory of the 4,000-some parcels it owns.

So far, the city has identified about 60 parcels for government review on its Web site. They include vacant lots in neighborhoods, land around a reservoir, houses and a mobile home park. The city has owned a dozen of the lots since the 1950s and 1960s, and two back to 1915, county records show.

The prospects of a sale are bittersweet for Jasper Lee Adkins, 81, and his wife, Blanche, 78. In the fall of 1958, they moved into a city-owned, two-bedroom home that abuts Highway 94 in the Stockton neighborhood, east of downtown San Diego. Rent was $70 a month.

The city acquired the lot for public projects in 1963 but didn't end up needing it. During the next three decades, the couple said they sought to buy the land, but the city wouldn't sell. After they both suffered strokes, they gave up trying. Rent is now $616 a month.

When a reporter told them that the city now is considering selling the lot, Blanche said they'd still be interested after all these years.

“It would have been paid for by now,” she said, referring to their efforts to buy the land more than 40 years ago. “But I can do nothing about it; you just have to take it as it comes.”

The city owns five houses and a duplex that may wind up for sale. Also on the list are 180 acres of land in the Cleveland National Forest, lots in Dulzura, open space in Sorrento Valley and a border patrol building in San Ysidro.

One property is a vacant lot in Grant Hill that a woman gave to the city more than a decade ago so proceeds from its sale would benefit public parks and libraries. Since then, the lot has been used as an illegal dump.

The most people potentially affected by a sale are those who live in Linda Vista Village, a 220-unit mobile home park overlooking Tecolote Canyon. Many of the residents have low incomes. Some are retired; others are families with children. Some have lived in the 75-acre park since 1980.

On Friday, about two dozen residents gathered in the park's clubhouse to try to figure out what comes next. They had more questions than answers. Do we have first right of refusal? Could we buy the land as a group? Could a developer build condos and force us out?

“How many times can I start over?” asked William Perry, 58, who bought a double-wide home and moved to the park to retire in 1999.

Margaret Neville, a single mother of two teenagers, is on disability. She said she simply can't afford to move. “Where do we go?” she asked.

The city leases the park to Tecolote Investors for about $160,000 a year. The lease, which expires in 2034, requires the company to make one-third of the homes available to low-and moderate-income families. Tecolote Investors collects about $1.6 million a year from residents, who pay between $590 and $638 a month in rent, according to city records. The files also show it cost Tecolote about $480,000 to operate the park in 2003.

Jim Barwick, who started as director of the real estate department in May 2006, said it's too early to address the residents' concerns. He stressed that the city had not yet decided to sell any land, and there would be public meetings before it does. He said he was not aware of a law that would require the city to offer land to people who live in the houses or mobile-home park before putting it on the market.

According to state law, government agencies are first in line to lease or buy certain surplus city properties if they plan to use them for purposes such as affordable housing, schools, parks and open space.

If, after 60 days, no government entity is interested, the city would take a closer look at the land to be certain it was expendable and appraise it to see what it's worth. If it's a good financial move to sell or sign a long-term lease, the real estate department would bring a detailed proposal for each lot to the City Council for approval.

A policy adopted in 1983 calls for the city to sell most properties at a public auction. There are exceptions for landlocked slivers that only an adjoining land owner would want to buy and for land a government entity might want, such the border patrol building in San Ysidro.

Barwick said he planned to recommend the council change the auction policy to allow some land to be sold on the market, which could bring in more money.

The city charter requires that proceeds of land sales go into a capital outlay fund that pays for new public improvements, such as buildings and sewer pipes. It states that money from the fund can't be used for repairs, such as fixing the city's decrepit water lines, but it can go to replace them.

Barwick did not specify what capital projects might benefit from the sales.