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Council closer to finalizing Pacific View deal

ENCINITAS — The council took another step toward acquiring the Pacific View site on Wednesday night.

Council members voted 3-2 in favor of a $50,000 deposit and other conditions spelled out in a memorandum of understanding for the property. That document paves the way for a final purchase agreement, which the council majority hopes to approve by the end of May.

But the agenda item sparked a long debate over whether the council should have even agreed to pay $10 million to acquire the site from the Encinitas Union School District.

Resident Jeff Eddington said he’s excited at the prospect of the city owning the site, but worried the council is getting “bamboozled.”

“The city offered $4.3 million for the property in the not-too-distant past, and is now offering more than 2.3 times that price.” Eddington said.

Councilman Tony Kranz, an advocate of the purchase, said the $4.3 million figure was based on the property’s current public zoning. And it was only intended as a first offer.

Additionally, Kranz said he voted in favor of upping the price knowing that EUSD had a strong rezoning case, which would have made the land much more valuable.

The city could have tried to fight the district’s rezone request, but that would likely have resulted in an expensive court battle, Kranz added.

Last month, EUSD was due to auction Pacific View with a minimum bid set at $9.5 million. With the clock ticking, the city submitted an offer just before the deadline. EUSD has delayed the auction by two months as a safeguard, in case the deal with the city falls through.

Kranz said the city could have waited to see if anyone participated in the auction, as a public speaker suggested. But he equated that with “rolling the dice.” The risky strategy could have meant losing the historic property.

Councilwoman Kristin Gaspar, who voted against the Pacific View offer last month, said EUSD has tried to rezone the property in the past.

She said the district didn’t have a compelling case for rezoning the property then, and not much has changed since.

She added the city offered too much for the 2.8-acre site. Gaspar voted against the memorandum of understanding, which a council subcommittee and EUSD subcommittee drafted. She stated the document puts unnecessary restrictions on the city.

It specifies that if the city wants to sell the land in the next decade, it must first offer it to EUSD for $10 million, plus the cost of any improvements.

But after 10 years passes, the city is free to sell to any buyer.

Given how much the city agreed to pay for the property, there shouldn’t be any conditions, Gaspar said.

Mayor Teresa Barth said that language was added to appease EUSD.

The district expressed worry over the city buying the site, rezoning it and putting it on the market to turn a quick profit.

Barth added it’s unlikely the city will sell the property. But its “hands aren’t tied” if it wants to do so in the distant future.

The council has floated the idea of putting a community venue there. Currently, the property is home to the dilapidated Pacific View Elementary, which closed 10 years ago.

Another stipulation notes EUSD is responsible for mitigation if toxic soil is found on the site.

The memorandum also states the city must place a $50,000 deposit down on the property. However, it’s refundable if the city and EUSD can’t agree on a financing plan.

On that note, Councilman Mark Muir, who also voted against the memorandum, raised questions over which type of bond will support the purchase.

The council will consider financing methods next month.

Muir brought up a handful of other concerns related to the purchase. Eventually, the council majority voted to cut off discussion and put the memorandum to a vote, drawing objections from Muir and Gaspar.

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1 comment

Lynn Marr April 19, 2014 at 10:36 am

“Additionally, Kranz said he voted in favor of upping the price knowing that EUSD had a strong rezoning case, which would have made the land much more valuable.” Council Member Tony Kranz did not know that EUSD had a strong rezoning case. It did not have a strong case, and that is why it dismissed its previous lawsuit. The Government Code which requires rezoning is dependent upon the School District first have offering at least 30% of a surplus school site to public agencies, including the City and the County, according to the terms of the Naylor Act, including in Education Code.

This was also affirmed by City Attorney Glenn Sabine in a staff report re a previous Pacific View agenda item. Sabine’s opinion regarding the applicability of the Naylor Act, prior to any request for rezoning was provided after the City had made an opening offer which was $1 Million over the only appraisal done in the current time frame and zoning, using local comps. But EUSD Superintendent Tim Baird violated the Brown Act when he violated the confidentiality of the closed session opening bid by the City for Pacific view, for $4.3 Million.

Instead of making a counter offer, Baird applied the pressure of the threatened auction, that allegedly had to go forward on March 25, because of a “phantom deadline.” The Government Code, which is set to expire on January 1, 2016, is not applicable in EUSD’s case, because the Board of Trustees cannot certify that capital expense outlays do not exceed revenues, and that no construction or facilities improvement would be required in ten years. It is highly unlikely that any monies from the sale of Pacific View could go into EUSD’s general fund for a “one time purpose.”

“The city could have tried to fight the district’s rezone request, but that would likely have resulted in an expensive court battle, Kranz added.” There is substantial evidence that Baird was bluffing. In any case, a court case, in which the city would likely prevail, would be far less expensive than the minimum of $5 Million too much the City is agreeing to pay. Council is allowing itself to be manipulated by fear of litigation, which threatened lawsuit would be less expensive, for taxpayers, than our overpaying for land already in the public domain, being exchanged between one public agency and another. The County has not done that to us. Our library sits on land owned by the County, which the City of Encinitas leases for one dollar per year.

We very much want the City to purchase Pacific View for a true community art and learning center. To help mitigate for the outrageous purchase price, and because superintendents, since Doug DeVore, including Lean King and Tim Baird, have insisted the property was to be exchanged for a commercial property, with a revenue stream, so the Naylor Act didn’t apply, then EUSD should now agree to carry the $10 Million loan for a minimum of 30 years at 0% interest. That would be for the greatest common good, benefitting school children, artists, art lovers, taxpayers, and future generations.

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