Committee forwards overhaul of appraisal rules for city property transactions
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Summary
Supervisors reviewed a wholesale rewrite of Chapter 23 requiring qualified appraisers and independent reviews for significant city property acquisitions, conveyances and leases; amendments set minimum payment rules and exempt the airport commission under FAA standards; the committee forwarded the ordinance with amendments.
The Government Audit and Oversight Committee considered an ordinance to require appraisals and appraisal reviews conforming to the Uniform Standards of Professional Appraisal Practice for specified city property transactions. Chair Aaron Peskin described a "wholesale rewriting" of Chapter 23 to standardize valuation practices for purchase, sale, lease and jurisdictional transfers of city real property.
John Opdyck, Director of Real Estate, told the committee the department plans to hire an in-house certified appraiser (an MAI member) to expedite reports and reduce dependence on outside consultants. Opdyck said additional internal capacity will help address enterprise-agency concerns about transaction speed.
Chair Peskin proposed amendments including: (1) transfers of real property must be paid at no less than 100% of appraised value unless the Board of Supervisors finds a public-purpose exception, with the Public Utilities Commission (PUC) to be paid at least historical cost; (2) for leases with base rent over $45 per square foot per year, the applicable commission/agency must obtain a market-rent appraisal and set rent at no less than the appraisal unless narrowly specified exceptions apply; and (3) delete the airport commission from coverage because FAA standards govern airport appraisal practices.
Deputy City Attorney John Givner suggested refined drafting for the exception language and an editorial change to consistently refer to "the Board of Supervisors." Brad Benson (Port of San Francisco) and other department representatives expressed appreciation for the opportunity to work on precise phrasing and requested continued dialogue on historic-rehabilitation projects that may not fit standard appraisal models.
After discussion the committee took the amendments without objection and forwarded the ordinance to the full Board with a recommendation that it be approved as amended. The committee record shows staff will continue to work with affected departments on final phrasing prior to Board consideration.
Next steps: the ordinance will be on the Board agenda for further review; departments and the City Attorney will finalize amendment language and address special project categories that may not suit standard appraisal approaches.
