City Council Backs Out of Property Purchase, Voting to Forfeit $1 Million in Irvine Taxpayer Money

Councilmember Tammy Kim took a few minutes out of campaigning for Mayor on Election Day to pop into a special City Council meeting to cast the deciding vote that cost the City of Irvine taxpayers $1 million.

Kim’s deciding vote produced a 3-2 Council majority at literally the last minute to back out of a previously approved $18 million property deal. The escrow on the property was set to close at 12:30pm on November 5th and the Council vote to nix the deal came at about 12:25pm.
 
Back in October, the City Council voted 4-1 (with Councilmember Mike Carroll voting NO) to enter into an $18 million deal to purchase property in the Irvine Business Complex (IBC) that could be used as a center for “bridge housing” to help Irvine residents faced with a temporary loss of housing to transition into permanent affordable housing.

Mayor Farrah Khan — who supported the purchase back in October — called the special Council meeting on November 5th to reconsider the deal after fierce opposition from IBC residents who said they had not been included in the process. Khan said her reversal came down to transparency. She said, “I am not very happy with the process. The (bridge housing) plan itself is very much needed in our City and I highly support it, but this particular property and how we’ve come to today is what’s in question.”

City Manager Oliver Chi tried to alleviate fears from the Council, stressing that the plan is not a “homeless shelter” for transient occupants but a broad program to help Irvine residents faced with a temporary loss of housing to transition into permanent affordable housing. “The intention is to create an affordable housing program that is targeted to prevent the growth of homelessness in Irvine,” Chi said.
 
Chi acknowledged that there had not been sufficient engagement with the community, but said: “The staff recommendation is to go ahead with the purchase. There are other ways that we could utilize the facility if the Council ultimately decides this is not the right location.” He noted that the price of the property was below current market value and the City could sell the property at a profit if it decides not to make use of it, saying: “We don’t think we should waste a million dollars, from a staff perspective.” (Chi’s comment about wasting a million dollars referred to the nonrefundable deposit that was part of the real estate deal.)

Vice Mayor Larry Agran backed Chi’s reasoning, saying, “I learned a long time ago that any time the City can acquire land it might need, at a decent price, it’s best to do it. Over the long haul, land values always go up in Irvine.”

Carroll then made a motion to withdraw from the deal and forfeit the $1 million deposit. Just before the vote, Kim, who had been absent, entered the chamber and took her seat. During the roll call, Kim joined with Khan and Carroll in voting to kill the deal and forfeit the deposit. (Vice Mayor Agran and Councilmember Kathleen Treseder voted against withdrawing from the property purchase and losing the $1 million.)

Kim immediately left the meeting after the vote, as did Treseder. Later that day, the Voice of OC interviewed Councilmember Kim who said she liked the deal, but she didn’t have time to “combat the misinformation” around it because she was running for Mayor, noting she missed almost the entire meeting because she was out speaking with voters. “I don’t have time to deal with this,” she told the publication.
 
Khan, Carroll and Agran remained in the Council chamber for another 45 minutes to continue hearing public comments from frustrated residents who urged the Council and staff to return to its previous practice of having the Finance Commission and Planning Commission review major actions before they are placed before the City Council.
 
“This is a very expensive lesson: $1 million,” said resident Dennis Lo. “We need to learn from it.”