10 MONTEREY COUNTY WEEKLY april 6-12, 2023 www.montereycountyweekly.com news A San Diego real estate tech firm has purchased The Independent luxury rental building in Sand City, paying $20 million in a bet on the Monterey Peninsula real estate market. Diversyfund—an online real estate platform that crowdfunds money from individual investors and uses it to purchase apartment buildings across the U.S.—acquired the property at 600 Ortiz Ave., it announced March 24. The seller, Urban Atelier LLC, is partially owned by Gerald Lyles and the family of late developer Don Orosco, who died in 2020. (Orosco and Lyles also teamed up to develop the city’s South of Tioga project.) The four-story building houses 61 apartments—a mix of studios, one-bedroom and two-bedroom apartments—and “stands alone in the [Monterey Bay] region as the only 50-plus unit project built here since the 1980s,” according to Cushman & Wakefield managing director Scott MacDonald, whose team brokered the transaction. The property also has more than 12,600 square feet of ground-floor commercial space, 11,000 square feet of which currently sits vacant. The rest of that space is currently occupied by craft beer house Post No Bills. Lewis tells the Weekly that more than 95 percent of The Independent’s units are already leased, and that Diversyfund was “really attracted by the fact that there isn’t a lot of newer [housing] product available in the [Monterey Bay] market.” Diversyfund’s press release on its acquisition claimed the Monterey Bay area has “experienced an influx of new residents looking to escape the economic and political upheaval of larger coastal cities.” Sand Dollars A San Diego real estate firm has paid $20 million for Sand City’s Independent building. By Rey Mashayekhi In November 2018, when voters on the Monterey Peninsula approved Measure J with 56 percent of the vote, they gave the Monterey Peninsula Water Management District a mandate: buy out Cal Am’s local water infrastructure, and become the Peninsula’s new water supplier—if feasible. The feasibility of the buyout was affirmed by the district’s consultants in 2020, but there was a hiccup thereafter—the district asked the Local Agency Formation Commission of Monterey County to activate the district’s “latent powers” to become a retail water provider. Despite LAFCO staff’s recommendation to grant the district such powers, the board voted against it. The district then sued LAFCO and the litigation continues. However, MPWMD General Manager Dave Stoldt has long maintained that the district doesn’t need LAFCO’s blessing to forge ahead, just that it could make things easier in the buyout process. But when it comes to water in Monterey County, nothing’s ever easy aside from pumping. So the district was going to move forward regardless of LAFCO’s determination, and on April 3 at Monterey City Hall, the district revealed its appraised value of Cal Am’s system, their first offer in the attempt to buy out the private water utility: $448,808,000. Before explaining the methodology behind the appraisal, Stoldt said the offer had been transmitted to Cal Am a few hours earlier—though Cal Am was not, and still is not, for sale. Perhaps more revealing than any of the explanations behind the valuation number was a graph put up on the PowerPoint presentation which showed the values other public agencies, from across the country, placed on private water utilities they were attempting to buy out. In every case, the final value was closer to the appraisals of the public agencies, not the private utilities. Evan Jacobs and Josh Stratton, who handle communications for Cal Am, won’t offer a number for the company’s own appraisal of its Monterey system. But they, along with Cal Am attorneys George Soneff and Joe Connor, say the attempt to buy out Cal Am’s system is misguided and will end in defeat. Soneff called it “stillborn” if it ends up in court. They also stressed the lengthy legal process, in the event that an eminent domain attempt is allowed to proceed in court. “These things take years,” Soneff says. “It’s just a shame—so much taxpayer money will be spent removing a well-regulated taxpayer utility. It’s not in the residents’ interests.” The Cal Am ratepayers attending the presentation—many of whom have been attending public water meetings for years—struck a different tone. Nearly all of them lavished praise on the district’s staff in keeping the process moving ahead, and many offered one-liners that excited the crowd. Sylvia Shih, a Seaside resident, told the district’s board: “If we ratepayers can afford to pay Cal Am, we can afford to buy it out.” Stoldt says that the financing plan for the buyout won’t require raising rates, adding that the buyout would theoretically decrease rate increases in the future. Going forward, the district board will have to approve a resolution of “necessity” to formally begin the eminent domain process which, if they opt to go that route, likely won’t happen until July or August. Four-and-a-half years after the passage of Measure J, the Monterey Peninsula Water Management District arrived at its price for Cal Am’s local system: $448,808,000. Offer Proffered The Monterey Peninsula Water Management District names its price for Cal Am’s local system. By David Schmalz Built in 2008, The Independent stands out as one of the few newer developments in the Monterey Peninsula’s notorious supplyconstrained real estate market. “If we can afford to pay Cal Am, we can afford to buy it out.” Daniel Dreifuss Daniel Dreifuss
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