The Rise And Fall Of The Land Scheme That Almost Cost The Oakland Unified School District
FROM THE PAGES OF THE BERKELEY DAILY PLANET NEWSPAPER
OUSD CONFIRMS REAL ESTATE NEGOTIATIONS
June 13, 2006
The state-appointed administrator of the Oakland Unified School District has confirmed that negotiations have begun with a developer over the sale or lease of prime Lake Merritt area land owned by the district, including the Paul Robeson Building administrative headquarters and several operating schools.
In a letter sent last week to OUSD Advisory Board President David Kakishiba, state administrator Randolph Ward said that a letter of intent could be signed as early as Monday, June 12, and that his office would then schedule “public hearings to review options, receive input and discuss the possibility of selling property at fair market value.”
Ward’s letter mentions 8.25 acres between 10th and 12th streets, the Lake Merritt Channel and 4th Avenue, including La Escuelita Elementary and MetWest and Dewey High Schools, but school board representatives have estimated that the inclusion of streets within the property boundaries brings the total acreage to 9.47.
According to a spokesperson in State Superintendent Jack O’Connell’s office, the final decision on the contract will be made by Ward, “but because he was appointed by Mr. O’Connell, obviously he is going to keep the state superintendent abreast of all the developments.”
It was not clear from Ward’s letter how the public hearings would be organized, though district Public Information Officer Alex Katz said by telephone that the process “will be totally transparent and will fully involve the public.”
While the proposed property disposition is expected to be raised by the public at the next school board meeting, to be held beginning at 4 p.m. this Wednesday, June 14, at the Paul Robeson Administration Building, 1025 Second Ave. in Oakland, the item is not on the meeting agenda.
It will be discussed in closed session, and Kakishiba said in a telephone interview that how much, if anything, Ward would say about the deal in public session depended upon whether the letter of intent is signed by the time of the meeting.
The letter of intent had not been signed by Monday afternoon, and district spokesperson Katz said that the signing “got pushed back a little” and was not expected by Tuesday, either.
News that contract negotiations for the proposed sale or lease of the OUSD Lake Merritt area property were reaching a final stage was first reported in the Planet last month, but since then, representatives of the State Superintendent for Public Instruction Jack O’Connell and Ward have been quiet about the proposed deal.
In his letter, Ward began his letter to School Board President Kakishiba by saying that the sale was being considered “to continue to move toward local control of the Oakland Unified School District and generate significant additional resources for schools and the classroom.”
Ward said that the contract proposal grew out of a 2004 discussion between his office and school board members over the sale or lease of the properties “as a way to pay down the debt and generate more funds for schools and students.”
The Oakland Unified School District was seized by the state in 2003 after it was forced to receive a $100 million line of credit from the state to close a massive budget deficit. About $65 million of that line of credit has been loaned to the state, with another $7 million loan for high-tech equipment approved by the state but not yet completed. The elected school board functions now as an advisory body to the state administrator, with no legal powers.
In a telephone interview Board President Kakishiba said that Ward’s letter “raises a lot of alarm bells for me” because, while Ward committed to “prioritiz[ing] the presence of La Escuelita Elementary School and the pre-kindergarten community in the Eastlake area,” Kakishiba said the state administrator “does not commit to keeping La Escelita on that site.”
“I don’t see a lot of land available in the Eastlake area to move La Escuelita,” Kakishiba said, adding that the continued residential development boom in the Eastlake/Chinatown area “makes it critical that we should be planning for the future educational needs in this community.”
Kakishiba said that while “it would be great to unload the $3.8 million debt service to the state” stemming from the state loan, he said he was concerned that school availability and expansion would be sacrificed if the proposal goes through in its present form.
“Is the state going to turn away from a multi-million dollar deal because it can’t find land to relocate La Escuelita?” he asked. “I don’t think so.”
Kakishiba said, however, that the commitment by Ward to a public input process was “a positive thing. That’s very new. I don’t think that this was contemplated before by the administration.”
In a telephone interview, Katz, the district spokesperson, said that “La Escuelita will remain here” in the Eastlake neighborhood, and that while it was not yet determined whether that location will be on the existing OUSD properties or somewhere else in the area “our commitment is to improve their situation. They have been requesting a better campus.”
The location of MetWest and Dewey High Schools on the property is less of an issue because unlike La Escuelita, these schools draw students from all over the district, and relocation to abandoned school site properties in other areas of the city would not have an impact on attendance in the Eastlake/Chinatown area.
There was also some disagreement over the role of return to local control in the proposed property sale.
Katz said that return to local control was “only one of the purposes of the proposed sale. It is ‘a’ purpose. The main purpose is to use this huge resource for the educational mission of the district, instead of seeing it crumble to the ground.”
Noting that the OUSD administration building is not earthquake safe, Katz said, “The only reason we’re doing this is to redirect this resource to the benefit of our kids and schools and for the benefit of the Eastlake neighborhood.”
Katz said that any new development in the administration building area would be an improvement over the present structure.
“It’s not like we’re going to put up a Wal-Mart here,” he said. “This is going to be a structure that improves the community.”
Still, Katz said that using the proceeds of the sale to pay down the state debt “would probably be a big step towards return to local control. State Superintendent O’Connell has said publicly that would be a factor.”
California Education Department Public Information Officer Hilary McLean said that “significant repayment of the debt will be a criteria for return to local control” of the Oakland Unified School District.
But at least one school board member, Gary Yee, said that it was unclear if the sale or lease of the property would directly lead to a return to local control, even if that money is applied to the state debt. Yee said he has taken a look at the district’s 2005 Multi-Year Recovery Plan, the document which is the state-mandated blueprint for return to local control.
“It was just a cursory look,” Yee said, “and maybe I overlooked it, but I didn’t see anything that mentioned sale of district property as part of the fiscal recovery plan.”
In its section on “Conditions for Return to Local Governance” the district’s Multi-Year Recovery Plan, put together in 2005 by Ward’s office, does not mention payment of the debt as a condition for return to local control.
Instead, referring to the SB 39 state legislation that authorized the state takeover, the recovery plan notes that “in order to have local governance returned, the district must demonstrate implementation of 138 FCMAT [Fiscal Crisis Management Assistance Team] Standards, covering five major functional areas of the district: 1) Community Relations and Governance, 2) Pupil Achievement, 3) Financial Management, 4) Personnel Management, and 5) Facilities Management, on a scale of 1 to 10. In each functional area, the district is expected to achieve an overall score of six with no individual standard within that functional area scoring below a four. When this scenario is achieved FCMAT will recommend to the Superintendent of Public Instruction that this particular condition of SB 39 has been met and thus control of that functional area should be returned to the Governing Board. [Italics and bold in the original recovery plan document.]”
FCMAT is the semi-private organization set up by the State of California to intervene to assist so-called troubled school districts.
SB 39 itself only required that the state line of credit be repaid over a 20 year period at a 1.78 percent interest rate.
Yee, who was elected to the board after the budget problems surfaced but before the district was taken over by the state, said that he was one of the trustees who initially proposed the sale of the administration building in order to prevent the state takeover. He says his position now is that the sale or lease of the Lake Merritt area school district properties should be a decision made by Oakland citizens rather than the state.
And in a letter to a local OUSD parents group email list, trustee Dan Siegel, who is retiring from the board at the end of the year, called on citizens to “organize to prevent the giveaway of the District's assets.”
“I am very concerned about the potential sale and worried about the prospect of a sweetheart deal with a politically connected developer,” Siegel wrote. “I am also very skeptical that Dr. Ward can make a deal that makes sense financially.”
Siegel added that “a sale [of the proposed property] must not only take into account the assessed value of the land, but also the costs to the District of moving and recreating the five schools and the future needs of the Eastlake and San Antonio communities for school sites. I think that it would be extremely irresponsible to sell school district property without considering these factors. …[I]t would be very foolhardy to sell property and then place the future leaders of the district in the position of having to buy additional property at much higher costs.
J. Douglas Allen-Taylor