For final time, Pacific View purchase OK’d

For final time, Pacific View purchase OK’d
The Encinitas City Council votes 3-2 in favor of authorizing the sale of $13 million in bonds to consummate the purchase of the vacant school site and to fund the renovation of the city’s dilapidated Moonlight Beach lifeguard tower. File photo

ENCINITAS — For one last time, a divided council voted on an item involving the impending purchase of the Pacific View Elementary School site.

The City Council voted 3-2 to authorize the sale of $13 million in bonds to consummate the purchase of the vacant school site and to fund the renovation of the city’s dilapidated Moonlight Beach lifeguard tower. The council’s vote came after finance staff advised that the bond repayment could be even higher than the $815,000 previously anticipated, but that the city’s unofficial budget showed an even larger surplus than anticipated, offsetting the increase.

Deputy Mayor Tony Kranz and councilwomen Teresa Barth and Lisa Shaffer voted in favor of the action, with Kranz calling it a “historic step in the journey of keeping Pacific View public.”

Mayor Kristin Gaspar and Councilman Mark Muir voted against the action, citing their long-held philosophical disagreement with the property’s $10 million price tag. Both council members, however, said it would be the last time they would vote against an item involving Pacific View.

“I think it’s important to see that moving forward that team player in terms of defining (the property’s) future use and visioning with the community,” Gaspar said. “The purchase price of the property was too high and also at the same time, it did…have sacrifices made and choices made, and those choices were not in line with community’s priorities of making sure roads are fully paved and putting enough resources in maintaining city’s infrastructure.

“But moving forward with visioning with the community, I am right there with you,” Gaspar said.

The council’s vote sets in motion the final stage of the purchase of Pacific View, which should probably close escrow by December, city finance staff estimated.

When the council first voted to move forward with the financing plan, the city originally estimated that it would require debt service payments of about $733,000 a year. That figure rose to about $815,000 when the city in the 11th hour said that the purchase would require the use of taxable bonds as opposed to tax-exempt bonds.

Finance officials told the council Wednesday that volatility in the bond market had raised their estimate on the annual repayment to $835,000 a year, but that number could be lower due to a recent decline in interest rates.

At the same time, city staff said, its unaudited financial reports from the fiscal year that ended June 30 showed a $6.5 million increase in the surplus anticipated from the budget year, with $5.9 million of that surplus earmarked toward a fund that would pay for capital improvement projects in the city over the next few years.
Shaffer, Kranz and Gaspar said the news reinforced in their minds that the city could afford the Pacific View purchase, despite critics who have argued that the city grossly overpaid for the bluff side property.

“We can afford this, it is a great investment in our community and we will have more money to do other things as well,” Shaffer said.

The City Council also voted earlier in the evening to approve a tentative plan of action for the property proposed by a council subcommittee composed of Shaffer and Barth, which included the use of taxable bonds to consummate the purchase, earmarking the property for interim uses that include arts, education and community gathering uses with an emphasis on theaters, museums, education and potentially outdoor sales such as swapmeets.

Following that vote, the council also voted to replace Barth, who is stepping down from the council in December, with Kranz on the subcommittee.

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