Asian-American couple in legal storm over purchase of exclusive San Francisco street ‘confident’ they will not be forced to sell
Taiwanese immigrant Michael Cheng and Hong Kong native Tina Lam plan to sit on investment and evaluate ‘sensible options’ while lawsuits play out
An Asian-American couple who bought a prestigious private San Francisco street are “confident” they will not be forced to sell it amid a legal tug-of-war between residents and city officials responsible for the sale.
When Taiwanese immigrant Michael Cheng and Hong Kong native Tina Lam bought the street in April 2015 for a bargain price of US$90,100 (HK$704,000), they knew little of the lawsuits and publicity it would spawn.
Presidio Terrace is located at the northern tip of the city, close to the Golden Gate Bridge, and is lined with more than three dozen multimillion-dollar homes. The opportunity to buy it came up when city officials put the road up for auction to recoup their money and interest after residents failed to pay an annual US$14 tax bill for 30 years.
Savvy couple snap up San Francisco street lined with mansions for US$90,000 and wealthy residents aren’t happy
“It was almost like putting your hand into a hornets’ nest and thinking, I’ll be fine,” Cheng said last week, reflecting on the purchase in an interview with the Post.
Cheng and Lam’s ownership of the street includes the road, pavements and other “common ground”, and potentially enables them to charge rent for using the street’s 120 parking spaces.
Residents were not even aware their street had been put up for auction, let alone that it had been sold, and only found out when the couple contacted them asking if they were interested in buying the street back. It had been owned by the Presidio Terrace homeowners association since 1905.
Lawyers for the residents have argued the process by which the land was sold did not follow proper procedures.
But Cheng’s lawyer was said to be “pretty confident” his purchase followed all the rules, and said he was “taking comfort in his confidence”.
The homeowners association has said the sale was not legally valid. Spokesman Matt Dorsey said a lawsuit residents had launched against San Francisco’s taxman and the couple to prevent any further sale of the street was an “unfortunate siltation” for all parties.
“An amicable resolution is possible, and perhaps there’s an agreement Mr Cheng and the homeowners could reach so that they can avoid spending money on lawyers,” Dorsey said.
“It’s a legal dispute neither side expected – and it was caused by the tax collector’s carelessness.”
Cheng, a real estate investor with 16 years’ experience, said he had not expected the “media storm that completely blew me away”.
The husband and wife are first-generation immigrants. Over time they have acquired “a handful of properties” but nothing quite like Presidio Terrace, Cheng said.
When Cheng, now 41, graduated from university, his first aim was to get on the property ladder.
“It was really a Chinese perspective. You grow up in the Chinese culture, and you’re always told to get a property. So as soon as I could, I got a property,” he said.
However, Cheng did not recommend following the approach he took when buying Presidio Terrace. “Buying from auctions is pretty painful. I don’t look forward to it. But it is one strategy, and one I don’t recommend,” he said.
“I would do some things different next time,” he added. “The heavyweight legal pressure from the high-profile and wealthy residents has complicated the process.
“I tried to deal with it the best I could. Having a high-powered attorney on their side representing the owners, saying certain things, makes it a little harder for me to figure out where I stand legally,” he said.
Still, “everything that has been reported has been reaffirming that we’ve done the right thing. It’s unfortunate the association won’t accept their responsibility for repeated mistakes over 30 years. Rather than work out a deal with us, they choose to waste public resources and money with a baseless lawsuit to blame the city and unfairly smear us in the process.”
Looking back on the auction, Cheng pondered the variety of purchases he could have made instead. They included a condominium parking lot and a solid cliff face, which had got him excited at the time as he saw potential to build a house on the side of it.
The publicity has seen people emerge with whacky ideas encouraging the couple to get rich by causing great disruption to the wealthy community, but that was not their goal, Cheng said.
He simply needed to recoup his investment, he said, but with the lawsuit against the city ongoing, he was happy just to sit on his purchase and hold off selling while he “evaluated” sensible options.