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PUC approves purchase of land for Irvington Tunnel project to avoid eminent domain
Summary
The commission authorized purchase of about 84 acres at 7484 Sheridan Road in Sono, CA for $3.72 million to support Irvington Tunnel construction after the seller refused a lease extension; the deal includes a short-term leaseback and staff said purchase avoids additional change-order costs estimated at $3 million or more.
The San Francisco Public Utilities Commission on Wednesday approved the purchase of approximately 84 acres at 7484 Sheridan Road in Sono, California, for $3,721,500 to support construction of the new Irvington Tunnel.
Emilio Cruz, Assistant General Manager for Infrastructure, explained that the PUC had an existing lease for dewatering and well access tied to tunnel construction but the landowner refused to extend the lease because the owner wanted to sell. The PUC negotiated an offer roughly 10 percent above its initial estimate and about 6 percent below the seller’s asking price and recommended purchase rather than pursuing eminent domain for the lease rights.
"If we do not have the wells in place, we will wind up spending at least $3,000,000 in construction change orders to make a safer work environment," Cruz said, arguing the acquisition provides operational flexibility during construction and remains an asset the commission could later sell. As part of the sale the owner will be allowed a short-term leaseback — described as free occupancy with maintenance obligations — for up to 18 months during a transition period.
The commission moved, seconded and approved the purchase by voice vote. Commissioners asked clarifying questions about leaseback timing and property management during the transition; staff said the seller would maintain the property during the occupancy period and the PUC included those terms in the negotiated price.
