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Supervisors approve $15.475 million purchase of Evans Street property for new crime lab amid debate over valuation
Summary
The Board authorized acquisition of 1995 Evans Street for use in the city's public safety capital plan, approving the purchase after questions about appraisal comparables and whether the city is overpaying. The vote passed 9'2 after lengthy questioning of the city's real estate director and budget analysts.
The Board of Supervisors authorized the city to acquire 1995 Evans Street for the new crime lab and related public-safety uses by recorded vote on Jan. 27, approving the purchase price the city negotiated under a previously executed option.
Supervisor Campos led questioning that dominated the discussion, telling the board he was "fundamentally" troubled by a comparison between the proposed purchase price and an appraisal. The Budget and Legislative Analyst's office told the board the proposed purchase price of $15,475,000 exceeded a February appraisal of $11,360,000 by roughly $4.1 million (36.2%) and that the comparables in the appraisal were small and dated. The analyst recommended future purchase-option agreements require appraisals and due diligence up front.
John Updike (Director of Real Estate) told the board the real estate division had additional, more recent comparable sales showing higher values and argued that appraisals are a backward-looking opinion and can understate prospective market changes. Updike described the unique timing complications created by structuring a purchase-option tied to a possible future general-obligation bond and CEQA sequencing: the board needed a site option well before the bond vote and before project approvals so CEQA and voter decisions could proceed in the proper order.
Campos repeatedly pressed for why an appraisal was not completed before the option was agreed and asked whether the office had solicited another appraisal; Updike said the negotiation reflected market judgment about a prospective purchase date and that an appraisal would only have reflected a prior point in time. The Budget and Legislative Analyst said the real estate office subsequently provided additional comparables orally to the committee, but the analysts had not had time to verify those numbers.
Supporters of the acquisition said the city faces limited availability of 2-acre PDR (production/distribution/repair) sites needed for a crime lab, that delay would incur sunk CEQA costs (cited as $1 million) and escalation in construction costs for the overall $165 million project, and that alternatives could be more expensive. Opponents argued for more diligence before using taxpayer funds for an above-appraisal purchase.
The final roll-call vote approved the purchase (clerk recorded 9 ayes and 2 nos). Supervisors who voted aye noted the operational need to secure a site for the crime lab; those voting no cited concerns about due diligence and value for taxpayer money.
