Legal Battle Looms Over Plans to Lease Closed-School Sites

A potential legal battle between the San Diego City Council and the city school board is brewing over the board’s plans to raise money by leasing closed school sites to private developers--a plan that city attorneys contend may violate state law.

In a closed session Tuesday, the council discussed possible legal action to block the school board from proceeding with plans to lease, for 99 years, the site of the former Farnum Elementary School to a private developer who could build as many as 89 apartments on the 3.1-acre Pacific Beach tract. A similar development plan is being considered in Point Loma on the site of the former Dana Junior High School.

The genesis of the council’s closed-door meeting was a memorandum prepared by the city attorney’s office that argues that the school district may have violated state law by failing to inform city officials that they had the first right of refusal to purchase the Farnum site, at 4275 Cass St., at a discount price. That four-page memo, prepared by Deputy City Atty. Harold Valderhaug, was sent to City Councilman Mike Gotch, whose district includes Pacific Beach.

School officials, however, dispute whether the city does, in fact, have that right of first refusal, and pointed out Tuesday that, regardless, the city was notified last summer of the plans to develop the former Farnum school site.

In short, the legal battle lines are drawn, with the stakes being the property-management program that the school district views as its best, and perhaps only, method of financing the construction of new schools.

“At this point, this is the only way to raise the dollars to expand the schools and build new ones in the heavily crowded areas,” said Tina Dyer, the school district’s legal counsel.

Gotch, who favors using the closed-school property for recreational purposes, has requested that the council’s Transportation and Land Use Committee examine the feasibility of a citywide acquisition program of the former school sites at the panel’s meeting next week.

“I can certainly appreciate the school district’s need for revenues,” Gotch said. “But I feel strongly that those revenues should not come at the expense of our neighborhoods. Parks, open spaces and schools are the heart of any community. To destroy any of them is to destroy the community.”

Saying that he favors the “adoption of a spirit of cooperation rather than confrontation,” Gotch called on school officials to work with the city to prevent residential or commercial development on closed-school sites. “I’d like them to just admit that they’ve made a mistake and reconsider their plans. However, if they don’t retreat, if they dig in their heels . . . we may meet in court.”

A key point of dispute between the city and school board is whether school officials properly solicited bids for development of the Farnum site.

Under state law, the school board is required to offer to sell or lease closed-school sites to public agencies before seeking bids from private developers, according to the city attorney’s memo. The city and other public entities then have 60 days to notify the school district whether they intend to accept that offer.

In a letter sent to the city last July, the school district indicated that it intended to lease the Farnum site for 99 years, adding that it was seeking a minimum annual rent of $250,000. However, city attorneys argue that that letter did not constitute proper notification of the city’s right of first refusal, because it did not specify that state law gave the city the right to purchase the property at a fraction of the market rate, provided that the land is used for recreational purposes.

The school district’s attorneys, however, argued that it had complied with state law via the July, 1985, letter. Further, school officials contend that, in regard to the proposed Farnum lease, the city did not even have the right of first refusal.

In support of that contention, Dyer cites a provision of the state Education Code that specifies that cities, or other public entities, have the first chance to purchase former school sites only if “no other available publicly owned land in the vicinity of the school site is adequate to meet the existing and foreseeable needs of the community for playground, playing field, or other outdoor recreational and open-space purposes.”

The city attorney’s memo states: “Apparently, the school district has concluded that the City of San Diego has not made (such) a determination.” Part of the purpose behind next week’s council committee meeting is to attempt to close that possible legal loophole by, presumably, a council finding to the effect that no other suitable property is available near the Farnum site.

J.V. Ward, the school board’s director of property management, said Tuesday that, in addition to the former Dana and Farnum sites, about a dozen other closed schools throughout the city also are being contemplated for development.

“We’re not getting money from the state, and the developer fees are inadequate,” Dyer said.

Money also could be a potential problem for the city, if the council attempts to purchase some of the closed-school sites.

“It would be impossible to speculate where the money would come from,” Gotch said, noting that costs would fluctuate dramatically depending on whether the sites were purchased or leased. “But the costs would be minuscule compared to the community benefit. If it becomes possible to acquire those sites, I’m confident that we could make the necessary decisions and that the money would be forthcoming.”