ENCINITAS — After rejecting a $4.3 million offer from the city to purchase Pacific View, EUSD (Encinitas Union School District) instead plans to auction the site.
Negotiations over Pacific View — a property the city wants to buy and convert into a community arts center — began in closed session this past September.
“As with any sale, there is an asking price and there’s an offer price,” EUSD Superintendent Tim Baird said. “And if those two don’t meet, the sale doesn’t work. We felt that the offer the city made was lower than the value of the land.”
Baird added that $4.3 million just isn’t enough given that the district was offered $7.5 million from the nonprofit Art Pulse in 2012. And, since then, the economy has improved and property values have increased.
The city submitted its offer in late November. When it didn’t receive a counteroffer, the city sought third-party mediation with the goal of finding a middle ground.
EUSD, which stated the property could be worth as much as $13 million, said the two parties were too far apart to go through the process, City Manager Gus Vina said after a special city council meeting regarding Pacific View on Wednesday.
“When do you use mediation?” Vina said. “When you’re too far apart and need to bring people to the middle.
“I’m saying that’s exactly when you need mediation,” he added.
At its Jan. 9 meeting, the EUSD board of trustees voted to auction the site off, ending negotiations with the city.
“We made an offer with the best intent in mind for the community and it’s unfortunate it wasn’t reciprocated by the district,” Councilwoman Kristin Gaspar said during the special council meeting.
The auction will likely start with a 60-day period in which groups, including the city, could submit sealed bids, according to Baird. After that time, the district will open the bids and hold a live auction.
The EUSD board of trustees will determine parameters for bidders in open session at its Jan. 21 meeting. The board will set a minimum asking amount, which could differ depending on if groups plan on buying the property with cash or a long-term finance proposal.
Also, Baird said bids could either reflect the property’s current public/semi-public zoning or residential zoning.
The district believes the property could be rezoned to accommodate housing, making it even more valuable.
With Proposition A passing this summer, some residents have argued a rezone request would have to go to a public vote.
Baird said district attorneys believe a rezone request couldn’t be denied; the state’s education code overrules Proposition A, a local ordinance.
He added that the education code guarantees school districts the right to develop unused property based on the zoning of the adjacent area. In the case of Pacific View, that’s R-15 residential zoning, he said.
“We think the code is pretty clear,” Baird said.
At its special meeting on Jan. 15, the City Council asked for a report back Jan. 22 with an opinion from the city attorney on whether the property could indeed be rezoned for residential housing.
The council also voted to make documents from the negotiations public, and it will discuss next steps in light of the auction announcement.
Various groups inquired about buying Pacific View over the last year, according to Baird.
Money from the sale of Pacific View could go into capital facility improvements or a one-time injection into the district’s general fund.
“The board would have to identify those priorities,” Baird said. “It could go to replenishment of some of our spent reserves; it could go to some of our infrastructure needs — there’s a lot of needs this could go toward on a one-time basis.”
The 2.8-acre site, which is on Third Street, between E Street and F Street, closed in 2003 due to declining enrollment. Baird said there still aren’t enough students in that area to support a school.
He noted EUSD doesn’t pay property taxes on the site, because the district is a government entity.
The city received two varying appraisals of the property based on the current zoning this summer. One came in at $3.29 million, and the second one totaled $7.28 million.