In a last-second meeting on Tuesday, The Irvine City Council voted 3-2 to walk away from a nearly $20 million real estate transaction less than an hour before the deal was scheduled to close. The city lost a $1 million non-refundable deposit.

the advice initially voted 4-1 on October 22 approve the purchase of two adjacent lots, 17572 and 17622 Armstrong Ave., with a plan to convert them into the city’s first homeless shelter.

Although the plan had not been presented to any city commission or through the normal course of public outreach, city staff had recommended the purchase because of what City Manager Oliver Chi described as a “small window where we have to participate in the transaction” to acquire the land at a lower than market value.

On Tuesday, he said the council discussed the potential transaction in closed-door meetings at least three times before Oct. 22.

Publicly, however, as of this week, only Councilman Mike Carroll expressed any concern about approving the deal without more transparency.

“You shouldn’t casually vote for $20 million for a facility that hasn’t been fully developed,” Carroll told colleagues on Oct. 22.

After that initial vote, condo owners associations in the Irvine Business Complex rallied against the proposed project near their homes and met with city officials to express concerns about transparency and safety. More than 100 residents of the Irvine Business Complex signed a petition to express their displeasure with the level of input they had on the project.

This led Mayor Farrah Khan, according to a memo to the city manager, to call a council meeting Tuesday to reconsider the land deal at the last minute. The council met at 11 a.m. and the deal will close at 12:30 p.m.

Dozens of Irvine residents who joined the meeting at City Hall applauded when the council ultimately rejected the deal.

Councilors Agran and Treseder maintained their initial votes.

“A lesson I learned a long time ago is that as long as the city can acquire land at a reasonable price, we should do it,” Agran said. “We are in an excellent financial situation. It is important to invest in the land. “The value of land always goes up here.”

The council could have approved the agreement and then decided to use the land for shelter or some other purpose, Chi said.

“We’re not real estate speculators,” Carroll said. “This was a flawed process from the beginning.”

Eliminating the agreement could postpone Irvine’s broader plans for what Chi called “a first-in-the-nation system of care for people who are homeless or at risk of homelessness.”

In October, Chi said the city planned to have emergency, transitional and permanent housing options up and running for people who are currently homeless by early 2026.

The Armstrong Avenue properties were slated to serve as a bridging shelter, a link between emergency services and permanent housing.

“The system itself is much needed in our city and I fully support it,” Khan said Tuesday. “But what is in question is this particular property and how we got to today.”

At its meeting next week, the City Council plans to review a proposed anti-camping ordinance in light of a Supreme Court decision this summer that does it easier for California cities and other states impose restrictions on people sleeping in parks and streets.

Currently, according to a staff report, Irvine is addressing unauthorized camping and storage of personal property on a case-by-case basis, without law enforcement options.