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Saturday, Aug 13, 2022
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Auction

Nearly a year after city officials kicked off a program to sell off excess parcels many vacant or unused L.A. has auctioned off 19 of them, adding more than $3.2 million to city coffers.

Another eight properties are in escrow and their sale is expected to be finalized by the end of July, bringing an additional $1.3 million to the city.

“We’ve just gone through and identified as many pieces of property as we can sell in as short an amount of time to bring in the most amount of money,” said Jess Romo, head of the surplus property section of the General Services Department’s Asset Management Division.

The city has so far identified about 40 plots of land throughout L.A. that are not being used and can be sold. But, Romo said, there might be as many as 300 parcels that eventually could be identified as extraneous and sold to the public.

The city acquired many of the excess parcels through county auctions of land on which the owners did not pay their property taxes. The county once sold those properties to the city for a small fee sometimes as low as $1 but the practice ended more than a decade ago. Much of the Venice property was acquired by the city in the 1940s and ’50s.

Over the last year, seven of the properties were sold for nearly $1.2 million to one buyer, who then sold them to a developer who plans to build two townhouses on each property.

Although the properties were auctioned for a competitive price only about 2 percent to 5 percent below market value, according to Romo the seven parcels’ original buyer was able to make a significant profit by reselling them.

“He ended up making about $50,000 per lot in about six months,” said Steve Aguilar, owner of Venice-based Boardwalk Realty by Steve Aguilar and Associates Inc., which brokered the buying and selling of the land.

Aguilar himself made money on the deal: The city offered a standard 3 percent commission to real estate brokers representing land buyers.

Most of the land sold so far have been vacant lots, and most of those have been in Venice. But among the properties sold or in escrow are two former fire stations one in Silverlake and one just north of Koreatown.

Since both fire stations have been designated as historical landmarks by the city, their buyers are required to keep the buildings close to their original condition.

But the buyers also are eligible for city tax credits and grants to help refurbish the buildings.

The group of three buyers who bought the fire station in Silverlake plan to convert it into a theme restaurant, Romo said. The station near Koreatown was bought by a carpet showroom owner who plans to move his business there.

Romo said the profits from selling those two fire stations almost $490,000 will go into a fund for the L.A. Fire Department’s use, since the purchase of the land and the building of the stations was done with Fire Department money.

The profits from any other land sold, as long as it was not originally bought by an individual city department, is split between the city’s general fund and a special fund for the council district where the land is located.

The one exception is any future land sold in Venice. Since sales from that community have already put $1.5 million in the city’s general fund, future profit from land sales in that area will be put in a special fund for the Venice community.

When the lots are eventually developed, Romo said the city can look forward to even more revenues from property taxes and business license taxes.

“We could conceivably miss out on a business tax if we don’t sell property that’s in commercial areas,” Romo said, adding that controlled development of homes and businesses typically benefits the area where it occurs.

By the end of summer, Romo hopes to sell off 11 more parcels of land located in areas such as Venice, Encino, Hollywood Hills and just north of downtown L.A. Those plots of land are expected to bring in another $1 million to $1.2 million in an auction expected to be held in late August.

“We had focused on Venice because of the value of the lots there, but now we have expanded our areas,” said Romo, the only city employee working full-time on the auctioning of surplus properties.

Selling city land is a complicated 32-step process, many of those with sub-steps, Romo said. This involves such things as offering the land to 15 different city agencies before putting it up for city auction and getting City Council approval for any land sale. The process, Romo said, means that it will take a years to sell all of the city’s excess land.

But he added that because the city is not acquiring as much land as it once did, the program will come to a natural end at some point.

“All things being equal,” Romo said, “this type of a program is finite in nature because we have a finite number of parcels.”

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