Optimizing the Use of Publicly-Owned Real Estate Achieving Transparency, Momentum and Accountability

Inadequate readily-accessible public information on publicly-owned real estate is part of the reason some properties have been allowed to languish and deteriorate, at a loss to the City. A more rational approach to handling under-utilized or surplus property requires that a comprehensive, detailed list of public properties is available on an ongoing basis. The Fleishhacker Pool House is a perfect example of a situation where being “out of sight, out of mind” allowed a property to become so neglected that it eventually was destroyed by fire, resulting in a real loss for the City. A more transparent property database will make such occurrences less likely in future.

Lack of transparent public debate contributes to suboptimal use of City real estate assets. The Kirkland Property is a perfect case in point. SFMTA may have a good case for retaining the property as a bus maintenance yard as recommended by its consultant. However, allowing SFMTA to abandon stated plans for converting the property to commercial and/or residential use without public debate prevents possibly better, more economically efficient alternatives from being considered.

The purposes for which the Surplus Property Ordinance was adopted are too narrow to effectively motivate City departments to identify surplus and underutilized properties for other uses or disposition. Further, the ordinance does not provide a department with any incentive to dispose of surplus or underutilized property.

Current practice allows City Departments and SFUSD to keep property on their surplus lists indefinitely without any consequence. The concern for a more rational approach to handling under-utilized or surplus property requires that a time limit be imposed on how long property may remain on these lists. If, after a pre-determined period, property which is identified as surplus or underutilized has not been put into use or fully-utilized or no plans have been adopted for its use or full-utilization, there should be specified consequences for the failure to act. 31

Passive management of publicly-owned real estate leads to valuable properties lying fallow for years. The City and SFUSD leadership must be charged and empowered to develop plans for utilization of surplus / under-utilized parcels, including public-private partnerships where feasible and desirable. Very valuable properties owned by City departments and SFUSD have been underutilized for decades and present prime opportunities to be repurposed or sold to create value for the City and SFUSD. The properties at 155/165 Grove Street, the Fire Chief’s House at 870 Bush Street, the lot at 7th Avenue and Lawton Street, and 1950 Mission Street are a few examples of properties that have been passively managed.

Given the location of 135 Van Ness Avenue and 170 Fell Street in the heart of the City’s cultural center, and the historic nature of the structures, their current status is far from the highest and best use of these unique properties. Plans by SFUSD to convert the properties into the School of the Arts have not moved forward because of, among other reasons, a lack of needed funding. Yet, at the time, and now, SFUSD owned and continues to own, sufficient surplus and underutilized property that if sold could fund the entire project. Other alternative and better uses of this complex may be possible. 32