The Encinitas’ City Council decision to purchase the former Pacific View Elementary School is proving to be an issue in the Encinitas Mayor’s race. Deputy Mayor (and Democrat) Tony Kranz fully supports the decision to purchase property for close to $10 million, before the School District put it out to bid in a public auction. Mayor (and Republican) Kristin Gaspar voted against the purchase, claiming that the price tag was too high.
The school sits on land which was deeded from J.L. Pitcher, in 1898, to the “Encinitas School District,” for the “education of Encinitas’ children.” The Encinitas Union School District (EUSD) purchased adjacent lots to the originally deeded land through the 1950s and 60s. The elementary school was built on the oceanfront site in 1953 and closed in 2003 (due to declining enrollment).
EUSD sought an amendment to the City’s general plan, so as to sell the property to a developer, which would build 26 housing units and an 8,000 square foot office building. Many residents hated that idea and want to create a city-owned and operated Arts Center on the site. A lot of support came from NIMBYs, “keep Leucadia funky,” and residents who think the old charm of Encinitas is giving way to (what many of them call) “new money.”
The plan was to buy the closed school and build a city-owned and operated arts center. Whether that is appropriate for a City with looming pension funding shortfalls is one thing, but the defining issue in this election is the stupendous price paid for the property. A year ago, the City Council had two appraisals performed on the property, which came in at $3.3 million and $7.3 million. The Encinitas Finance Director suggested that they could afford no more than $3.3 million. This is $10 million less that the $13.5 million the School District claimed it was worth.
In my business, we would call that an “irreparable difference” and wish the seller well. But, the City offered the School District $4.3 million. The School District declined to counter the offer and announced it would go to public auction. At this point, all elected officials seemed to be acting responsibly. Council members were following the advice the Finance Director and independent property appraisers offered. The School District was seeking to maximize the value of the property. Council members were getting taxpayers value for the dollar and School District trustees sought to get maximum value for the students. The “irreparable difference” couldn’t be more pronounced.
The Democrats on the City Council (including Kranz) really wanted that ocean-view arts center though. Right before the property auction was about to begin, the City Council came in with a $10 million bid. That offer stalled the auction and the School District trustees accepted it rather than risk an auction. The City Council, in a 3-2 vote along party lines, voted to pay close to three times what the Finance Director said they could afford–and they intended to pay it with debt. Kranz voted for the purchase while Gaspar voted against it.
To add insult to injury, the City Manager reported to the Council that the municipal bonds issued, to acquire the property, won’t enjoy tax-free status. The City Council voted (again along party lines) to pay extra interest for the already expensive property. Not only is the City paying three times the low valuation, and 130% of the high valuation, it will cost and extra $800,000 annually in interest (over 30 years). This $3.3 million “project” is now looking like the $30 million mistake on the cliff.
Tony Kranz is running proudly on this record and slamming Gaspar for not agreeing to the $30 million mistake.
It’s like he’s giving her the election on a silver platter.