The City Council said it’s still interested in the property
ENCINITAS — EUSD (Encinitas Union School District) is asking potential buyers of Pacific View to plunk down no less than $9.5 million — more than double what the city recently offered the district for the property.
The EUSD board of trustees voted 4-1 on Tuesday night on parameters for Pacific View’s public auction, set for March 25.
Two weeks ago, after declining a $4.3 million offer from the city to purchase Pacific View, EUSD officials decided to pursue an auction.
Board President Marla Strich said at Tuesday night’s meeting that it’s understandable the city didn’t want to overextend itself financially. She went on to say EUSD believes the property is worth much more than $4.3 million, and accepting the highest possible offer on the property will improve the district’s fiscal health.
“We do have a fiduciary duty to the children of this district to maximize our assets,” Strich said.
The city entered into negotiations with EUSD this past fall with the intent of buying and converting the property into a community arts center. Yet, the district stated it would entertain bids calling for houses to be built on the property.
Over the past 10 years, Strich said that the district has repeatedly tried to advance proposals for Pacific View that benefited the district and the city — only to be stymied.
The most recent failed deal: the nonprofit Art Pulse wanted to build a community arts center and homes on the property in 2012, but the $7.5 million proposal didn’t meet a key deadline.
Currently, proceeds from the sale of Pacific View could be injected into the district’s general fund, EUSD Superintendent Tim Baird said. However, he added the law allowing that accounting practice could expire as early as 2016.
“There is a timeline,” Baird said. “And so for the district to again delay in terms of moving forward, you could jeopardize your ability to best utilize the proceeds from this asset to support the needs of all of the students in your school district.”
Money from Pacific View could also be applied to capital improvement projects.
Encinitas Councilman Tony Kranz, one of two public speakers at Tuesday’s meeting, who said he’s representing himself and not the rest of the council, said the property should remain public land due to its historic nature. He noted the city’s oldest building, the 1883 schoolhouse, sits on the site.
“It’s the legacy of our community,” Kranz said.
The 2.8-acre site on Third Street in downtown Encinitas also hosts a school that was built in the 1950s and closed in 2003.
The auction terms specify that bidders will be required to preserve the 1883 schoolhouse.
But Trustee Maureen Muir, who voted against the auction, said the entire property, not just the 1883 schoolhouse, is part of the city’s history.
“I don’t agree with this direction at all,” Muir said.
With Tuesday’s vote, EUSD is now accepting sealed bids for Pacific View until March 24. On March 25, the district will open the bids and hold a live auction.
At Wednesday night’s City Council meeting, council members expressed disappointment over EUSD putting the site up for auction. But they said they’re still interested in the property and agreed to explore putting together another offer in February.
The city based its $4.3 million bid on two recent, independent appraisals of the site, one for $3.3 million and the other for $7.3 million. Those appraisals took the land’s current public/semi-public zoning into account.
But EUSD believes the state’s education code gives the district the right to have the land rezoned for private homes, increasing the value of the property. Baird noted EUSD received a $13.5 million appraisal in 2007 for the site under mixed-use zoning.
Potential buyers can bid on the property’s “as is” zoning, or factor in the possibility of it being rezoned for homes. Regardless, bids won’t be looked at if less than $9.5 million.
However, Proposition A, the growth-control initiative that passed this summer, could pose a roadblock for plans to build homes there. The initiative requires that rezone requests go to a public vote, yet there’s uncertainty over whether Prop A is applicable to Pacific View.
When asked how a judge would rule, Glenn Sabine, the city’s attorney, said at Wednesday’s meeting that he’d rather advise the council on the matter in private.
“That’s something I’d want to advise you under attorney-client privilege,” Sabine said. “I wouldn’t want to compromise the city’s position with any comments I might make on the dais.”
Sabine added that the debate centers on whether Prop A or the state’s education code governs the property.
Several public speakers urged the City Council to begin eminent domain proceedings to take the property.
The city asked Linda Bartz, an attorney specializing in eminent domain, to provide a report on the topic.
To move forward with eminent domain, the city must show it has designed a viable public project for the land. And the city must complete the necessary environmental documents. The city has fulfilled neither of those requirements, along with others. Completing them in time would be difficult, according to Bartz.
This story has been updated to reflect the actions of the City Council on Wednesday night.