A group of Balboa Peninsula homeowners who lease lots from Southern Pacific Land Co. are protesting SP's offer to sell them the beach community properties for amounts ranging from $103,000 to $116,000 per parcel, claiming that the prices should be much lower.
The San Franisco-based subsidiary of Santa Fe Southern Pacific Corp. should cut its asking price by 40%, the protesters say, to account for the value of the buildings and other improvements they have made over the years.
SP bought the land in 1911 and executed 50-year leases when the lots were developed in the 1950s and 1960s. The leases did not include provisions for the eventual purchase of the lots by the homeowners but did stipulate that rents would be raised after 25 years. Many of the properties are developed with rental units.
SP decided last month to sell all 126 lots for what it says are steeply discounted prices and refuses to negotiate for lower prices. The company said the lots on Seashore Drive and Balboa Boulevard are worth well in excess of $150,000, but would be sold for prices ranging from $103,000 to $116,000.
Steep Rent Hikes Seen
The first rent hike for most of the leased lots will occur this summer, and some rents could increase as much as 300%, said Susan P. Saltzer, Southern Pacific spokeswoman.
She said SP officials decided to sell the property because it does not fit in the company's investment portfolio, Saltzer said. If current homeowners decline to buy the lots, she said, they will be offered on the open market.
"It's difficult to understand why Southern Pacific won't negotiate if they're really interested in selling the property," said Rick Quinlivan, chairman of the Oceanaire Assn., whose members own residences on some of the leased lots. He said his group "did obtain the consent of approximately 70 leaseholders to negotiate at 60% of the price offered by Southern Pacific. . . . But Southern Pacific flatly indicated to us that they were unwilling to negotiate."
Accord Reached With 50
Saltzer said Tuesday that more than 50 leaseholders had agreed to purchase their lots by SP's June 15 deadline. On Monday, she said, an additional 20 leaseholders contacted the Independence Mortgage Co., which is managing the property sale, to say that they were interested in buying.
"I really feel we're pretty much on the mark" with the sale terms, Saltzer said.