Original Publication on March 29, 2021. Updated on April 7 to include CalTrans statements.
CalTrans is trying to sabotage South Pasadena’s effort to inexpensively acquire control of dozens of dilapidated properties it owns within the abandoned SR 710 extension corridor, according to a local attorney.
Chris Sutton, who has spent decades representing CalTrans tenants in various litigation, told the South Pasadena Preservation Foundation he believes the agency is acting to sell as many of the houses as quick as it can at market prices before passage of new legislation by Sen. Anthony Portantino requiring it to sell the properties at the prices it originally paid over 50 years ago.
The effort comes even though the city said that in a recent meeting with CalTrans District 7 Director Tony Tavares, the agency “was open to the idea of new legislation that would allow CalTrans to sell the surplus properties to the city in one or several large transactions.”
Mayor Diana Mahmud presented the plan to the City Council March 17, explaining the city-drafted bill, SB-381, would amend the 1979 Roberti Act which sets the rules for the sale of the properties and the priority order of who can purchase them. Roberti is aimed at giving the original owners or existing tenants purchase priority. The city can only buy multi-family units and must compete with other “housing related entities.”
The Portantino amendment would give the city a higher purchasing priority — it could buy the properties for an estimated $6 million, in exchange for covenants assuring their availability as affordable housing for 55 years. The savings could be used to fix up the homes, many of which have fallen into serious disrepair during decades of CalTrans management.
But when the plan appeared on the City Council agenda for the first time March 17, the Mayor ran into a buzzsaw of resistance from CalTrans tenants, city preservationists and others who said it was not sufficiently vetted with local stakeholders. Once it was clear a full endorsement vote wouldn’t pass, Mayor Mahmud agreed to a resolution under which the Council gave its support to the concept contingent on further amendments to be worked out after greater community review, including a special City Council meeting with Portantino set for the evening of March 29.
Two days later, Sutton said, as many as two dozen CalTrans tenants in town received letters saying if they wanted to purchase their property at fair market value, they must come up with the financing by April 19 or waive their purchase right under Roberti. The letters were the first communication CalTrans offered these potential buyers since they formally expressed their desire to buy over three years ago, Sutton said. In addition, the CalTrans letters did not address a Roberti provision that would allow buyers to deduct from the purchase price the cost to upgrade the properties, which in some cases exceeds the sales price.
The only intervening event, Sutton told the South Pasadenan News, was the introduction of Portantino’s bill. Sutton told the SPPF the letters are “an attempt to sabotage the Portantino bill” by trying to quickly wrap up the sales before the bill takes effect and forces them to sell the properties at the original price to the city.
“CalTrans staff has been undermining the goals of the Roberti Bill for decades,” he said. CalTrans does not agree with the law, despite a 2009 Attorney General opinion that Roberti complies with the state Constitution. “It is not a gift of public funds and not a violation of the gas tax.”
Caltrans public information officer Eric Menjivar said a total of 10 letters went out to tenants and one former tenant “who have priority to purchase the properties in an as-is condition at fair market value. The letters requested the potential buyers to submit a prequalification letter, not a loan approval, from a lender in 30 days.”
Menjiver also rejected the notion that the timing had anything to do with SB 381. He said the properties “were released in 2016 as Phase 1 of a plan” under Roberti to offer them to HREs, but that no responsive bids were received. “Caltrans then moved to current and former tenants and notified them of the opportunity to purchase. The department’s intent in sending the letters now is to offer the properties while interest rates are favorable.”