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City to buy Pacific View for $10 million

ENCINITAS — Near the steps of the Pacific View property on Thursday, Councilman Tony Kranz and EUSD Board President Marla Strich announced the city would purchase the property from the district for $10 million.

The deal came on the heels of an eleventh-hour offer and after months of back-and-forth negotiations.

The EUSD (Encinitas Union School District) board of trustees voted 4-0 on March 21 to accept the city’s offer for the property.

Kranz told the crowd of roughly 50 people at the press conference that the city could look into crowdfunding as one option to finance the deal, adding that there are government versions of the popular crowdfunding website Kickstarter.

“We’re not going to be bashful at looking at ways to make this less impactful on the budget,” Kranz said. “There’s no doubt it’s jumbled our budget significantly, but it was an important stretch. It’s an important piece of property that’s our history.”

Strich said the size of the crowd at the press conference was a testament to the public’s support of the deal.

The city also agreed the 2.8-acre land will remain public and can’t be rezoned or resold, it was disclosed.

“I’m so relieved for the community,” Mayor Teresa Barth said in a phone interview last week. “I know so many people were genuinely frightened by the thought of losing that legacy property. And now we’re going to be able to preserve it for the future.”

The deal is a dramatic turn from just two weeks ago, when it looked like EUSD was going to proceed with its planned March 25 auction of the site.

More than a week ago, following residents’ passionate pleas to cancel the auction, EUSD sent a letter to the city stating council had one last chance to buy the property. The letter went on to say EUSD would consider a deal only if it received an offer of at least $9.5 million from the city by March 21.

On March 19, with that deadline nearing, councilmembers then voted 3-2 in closed session to put forward a confidential offer.

“We’re just glad it finally worked out — that the city and district could come to agreement on this,” EUSD Superintendent Tim Baird said March 21.

The district and city will meet in the coming months to discuss how the city will pay for the deal and the type of purchase agreement, and Baird said he hopes to complete the sale soon.

Various plans for the property, including homes and an arts center, have fallen through since the Pacific View Elementary school shuttered 10 years ago.

EUSD and the city started a fresh round of negotiations this past fall, spurred by the city’s desire to build an arts or community center at the location.

In late November, the city offered $4.3 million for the site, which the district deemed way too low. EUSD then voted to auction the property off, raising the prospect of homes or mixed-use development going there.

Because the financing of the deal hasn’t been settled on, as a backstop, the board of trustees also voted on March 21 to postpone the auction until May 22.

“There’s certainly details to be done,” Baird said. “So I think it was prudent for the board to postpone instead of cancel (the auction). But there’s still plenty of time to get this deal done so this auction can be canceled.”

Baird noted EUSD Trustee Maureen Muir recused herself from the March 21 vote because her husband, Mark Muir, serves on the City Council and voted on the item.

Mark Muir and Councilwoman Kristin Gaspar voted against the city putting forward an offer for the land March 19.

At that council meeting, Gaspar said the property is unique, but the council majority wants to pay too much for it.

“The offer comes with considerable sacrifice to our entire community, absent public discussion about that sacrifice,” Gaspar said. “The offer being made strays far from the appraised value.”

The city received two appraisals of the property, one for $3.3 million and the other for $7.3 million.

The public has eagerly watched the Pacific View negotiations — and gotten involved. To break the stalemate between the city and EUSD, last month resident Scott Chatfield launched SavePacificView.org, an online campaign that resulted in 700 emails urging EUSD to stop the auction.

“Credit goes to the 700 people, most of whom sent heartfelt emails,” Chatfield said.

When reached March 21, Chatfield said he “salutes both entities for showing courage and doing the right thing.”

John S. Pitcher deeded the property to the school district in 1883. Back then, Encinitas’ original schoolhouse was built on the site, and the structure was placed back on property about 30 years ago.

As part of the deal, the city also agreed that the schoolhouse would remain on the site.

Barth said she expects the city to hold community workshops — both online and traditional town halls — to gather input on what could be done with the property.

She likened the property to the Encinitas Library, which was also contentious due to the price, but since opening in 2008, has been well received.

“The library is a community asset that was worth every penny and more, and I know Pacific View is going to be the same,” Barth said.

 

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1 comment

Lynn Marr March 29, 2014 at 10:45 pm

It is the very LEAST Superintendent Tim Baird and the EUSD Board of Trustees can do to allow us to pay this new debt over a term of 30 years, at zero percent interest.

Monies received from sale of surplus school site property can only go into a school district’s general fund, if the school site was ORIGINALLY purchased entirely with local funds. Pacific View, except for approximately .47 acre, was DONATED, in 1883. It was NOT entirely purchased with local funds. Lots were purchased in the 60’s, totaling .47 acre, to bring the entire parcel up to 2.82 acre. The original donation of land measured out to be approximately 2.35 acre, which, again, was DONATED, not purchased.

Also, the money cannot go into EUSD’s general fund, for a “one time general purpose,” unless and until, according to Government Code Section 17463.7 (d) (1), the District must certify to the State Allocation Board that “The school district has no major deferred maintenance requirements not covered by existing capital outlay resources.”

This would be challenging to demonstrate considering EUSD’s Capital Facilities/Technology Project Lists, all of which expenses are to be paid out of facilities improvement funds:
http://www.eusd.net/AboutUs/Annual%20Reports%20Library/Capital%20FacilitiesTechnology%20Project%20Lists.pdf

This law is from the same section of Government Code, which has been used by Baird to create false deadline pressure, to break out of exclusive negotiations, violating the Brown Act by releasing the City’s confidential opening bid. This was all allegedly because that part of the Government Code, pertaining to the ANY money from the sale of a surplus school site EVER being allowed to be deposited into a school district’s general fund will be sunsetted on January 1, 2016.

The government is to be for the people and by the people. This is already publicly held land, being sold by one public agency to another, land that was donated for public use, for the children of the 1883 settlers, and for future generations.

There is too much profit made by TRANSACTIONS, when the land is really going from one public use to another. We do not need a lot of MIDDLEMEN, such as banks, collecting interest. The School District maintained, up until February of 2012, that because it wanted an ongoing revenue stream, the District planned to exchange Pacific View for a commercial property WITH A REVENUE STREAM. That was why past Superintendents Doug DeVore and Lean King, and as late as 2010-2011, Tim Baird, said the Naylor Act did not apply.

The only appraisal ever done by the District, recently released, but setting a value effective on June 6, 2007, so almost seven years ago, was based on two extraordinary assumptions. The property was appraised with the understanding it would be rezoned to mixed use commercial, and the property was appraised under the extraordinary assumption, that Pacific View was to be exchanged, NOT sold.

The District has repeatedly said to the press and to the public that it wanted a revenue stream. Now we can give them one, for thirty years. $10 Million is a great deal of money, over three times the only appraisal in the current time frame, the current zoning, using local comps. City Manager Gus Vina violated the Brown Act and prejudiced the City’s position by releasing an appraisal report received in closed session, which did NOT have to be accepted by the City, because it used NON LOCAL comps, in Los Angeles, including on Wilshire Blvd, WITHOUT AN OCEAN VIEW, which threw off the valuation curve.

We taxpayers are paying for two SCHOOL BONDS O & P (P passed in 2010) for 30 years, each. That is added to our property tax bills, which we pay in April and December. The School District has no problem asking us for $25 for every $100K of the value of our homes, X 2, so $50 for every 100K of our homes’ values, according to the County Assessor, EVERY YEAR for 30 years. This doesn’t include another $25 per 100K of Assessor’s value, for the San Dieguito High School District bond that passed, or the additional taxes we pay as the result of citizens’ passing Prop 30, statewide.

We know the bottom line and the highest value is not all about making money, profit, for the few, at the expense of the many. The profit motive works, especially in private industry, but public agencies are to be non-profit.

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