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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

San Francisco County Grand Jury • 2008-2009

San Francisco Kindergarten Admissions: Back to the

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings 8 findings

The SFUSD owns a great deal of property for which it has, and has had for a long time, no educational use.

The SFUSD has recognized the seriousness and importance of making better use of its real property. Among the most significant steps taken by the SFUSD in making better use of its property is that it retained CBRE Consulting, Inc. to study the propriety of selling some of the SFUSD's surplus property. The study resulted in a draft report dated January

From SFUSD and City records, including the CBRE study, it may be concluded that the selected properties would sell for an estimated $134 million and are capable of having built on them a total of 871 residential units which would range in value from a low of $435.5 million to a high of $697.8 million.

Notwithstanding the previous resolutions of the Board of Education and the extensive studies on the subject, interviews with the Commissioners of the Board of Education and other key district personnel make clear there is a continued reluctance to sell or lease any of the SFUSD's real property- even properties that will never have an educational use.

Under the law, there are restrictions on the uses of proceeds received from the sale of real properties. See Cal. Educ. Code Sections 17455 through 17484. Even so, selling SFUSD surplus property would result in better facilities and would result in opportunities to shift resources to other priorities.

The Jury's review of the CBRE study and additional information indicates that the result of SFUSD selling the selected surplus properties would be the following: Α. the City would receive an annual tax revenue, conservatively, of between $4.35 million and $6.98 million; В. the SFUSD would receive its share of property taxes, an amount annually that can be estimated as between $1.31 million and $2.1 million; and C. neighboring properties no longer would experience devaluation as a result of the disrepair and disuse of SFUSD properties.

At stake is an enormous amount of property. The CBRE report did not include consideration of additional property that should be sold. Specifically, the SFUSD anticipated selling its Font Street property for approximately $20 million. In addition, the CBRE report did not include consideration of the full 20% of the SFUSD property that the Board of Education recognized is surplus.

The City has an interest in preventing the blight that results from disuse of SFUSD properties. The City also has an interest in encouraging the productive use of real property within City and County limits. The City has, on more than one occasion, provided for SFUSD "Rainy Day" or "Bail Out" funds and annually provides through City departments tens of millions of dollars in funds to the SFUSD for specific programs. Finding 1 2 3 4 5 6 7 8 Response SFUSD Χ Χ Χ Χ Χ Χ Χ Χ Mayor Χ Χ Χ Χ Board of Χ Χ Χ Χ Supervisors

Recommendations 4

R1

2 3 4 Response SFUSD Χ Х Χ Mayor Χ Board of Χ Supervisors ENDNOTES 1 See Nicole Achs Freeing, School Board Notes, http://san-francisco-school-board- notes.greatschools.net/2007/05/index.html (hereinafter, "School Board Notes"). SF Schools to Market 8 Properties, San Francisco Business Times, May 2, 2008. San Francisco Unified School District, Demographic Analyses and Enrollment Forecasts Report, July 2002. San Francisco Unified School District, Final Report & Resolution of the Board of Education For Surplus Space and Real Property, May 8, 2007 ("Final Report"). SF Schools to Market 8 Properties, San Francisco Business Times, May 2, 2008. See, id., San Francisco Unified School District, SFUSD Description of Property by Parcel Number (Revised), September 2008. See Resolution 56-14A9 (8/23/05) ("Feasibility of Selling, Leasing or Subleasing Surplus Real Property") (attached hereto as Appendix 2); Resolution 53-22SM1 (5/22/05) ("School Consolidation Policy" outlining criteria to guide school closures). Final Report at 1. Final Report at 1. Final Report at 1. Final Report at 1. See Cal. Educ. Code Sections 17455 through 17484. San Francisco Unified School District, Draft San Francisco Unified School District (SFUSD) Evaluation of Potential Surplus Sites, January 2009. The fees, generally referred to as "school fees," currently amount to $2.24 per square foot for new residential construction and 27¢ per square foot for new commercial construction. See Gov. Code Section 53080. See, e.g., Save Our Child Care Center- NOPNA 12/16/2008, http://www.nopnawiki.org/index.php?title=Save_our_Child_Care_Center. Three examples make clear the consequences of the SFUSD's failure to establish and move forward with a general plan: SFUSD officials acknowledge that the Font Street property recently could not be sold because SFUSD could not move quickly enough. SFUSD neither could get the top price when it was possible nor could accept a lower price once prices dropped in a dynamic market. Assemblywoman Fiona Ma had introduced legislation to remove some of the limitations on use of the funds acquired by sale of SFUSD real property. This legislation now is dead in committee. Some SFUSD personnel would delay sales until this legislation is passed. SFUSD continues to mull over numerous proposals that come to its attention. Land swaps with the City have been proposed that could offer the SFUSD significant advantages. Similarly, SFUSD should be actively pursuing proposals to develop housing for teachers. In the absence of a long range plan, these opportunities tend to be studied multiple times and, over the years, simply evaporate. During interviews with SFUSD personnel, they pointed out that some basic issues must be addressed when selling surplus property. For example: Care must be taken that property is properly designated surplus under the law. It is difficult to purchase real property; thus, before selling real property, SFUSD must be reasonably certain such property will not be needed in the future. Individual neighborhoods (e.g., the Mission Bay District) may not follow trends predicted in otherwise-accurate demographic reports; accordingly, the SFUSD should be careful not to sell real property in growing neighborhoods. There are significant limitations regarding the uses of money from sales of real property. Nevertheless, each of these problems had been addressed at great length before the Board of Education adopted the Final Report of the Advisory Committee and before the CBRE Report was completed. These issues should not prevent SFUSD from selling the properties identified in these documents. Moreover, these concerns should not, in any event, prevent the SFUSD from adopting a long-range plan for the sale or lease of its additional surplus properties. See Mayor Gavin Newsom, City and County of San Francisco 2008 State of the City, http://www.sfgov.org/site/uploadedfiles/mayor/PressRoom/NewsReleases/01%20-%202008% 20SOC%20Education.pdf, slide 24; Office of the Mayor of San Francisco, 2008 City and County of San Francisco State of the City, Education, http://www.youtube.com/watch?v=JWfIBw0ICYM. See Jill Tucker, Newsom Boosts Rainy Day Cash for Schools, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/03/11/BAJ516CT98.DTL&hw=tucker+rai ny+day&sn=001&sc=1000; CBS5.com, SF Releases Rainy Day Funds To Keep Teachers, http://cbs5.com/local/San.Francisco.teachers. 2.974734.html 20 See Mayor Gavin Newsom, City and County of San Francisco 2008 State of the City, http://www.sfgov.org/site/uploadedfiles/mayor/PressRoom/NewsReleases/01%20-%202008% 20SOC%20Education.pdf, slide 23; Office of the Mayor of San Francisco, 2008 City and County of San Francisco State of the City, Education, http://www.youtube.com/watch?v=JWfIBw0ICYM. . . . . . . . . . . . . . . . . . . . . . **
R2

To the SFUSD Examine the use of all remaining fallow and functioning (Respond in 60 days): properties with a view toward consolidation of services, efficient use of properties and the creation of new income- producing properties.
R3

To the SFUSD The Board of Education must adopt a long range real estate (Respond in 60 days) plan that demonstrates prudent stewardship of its properties.
R4

To the Mayor and the Make availability of City funds contingent upon the SFUSD Board of Supervisors meeting specific goals toward the sale of surplus property as (Respond in 60 days): spelled out in a long range real estate plan. Recommendation 1 2 3 4 Response SFUSD Χ Х Χ Mayor Χ Board of Χ Supervisors ENDNOTES 1 See Nicole Achs Freeing, School Board Notes, http://san-francisco-school-board- notes.greatschools.net/2007/05/index.html (hereinafter, "School Board Notes"). SF Schools to Market 8 Properties, San Francisco Business Times, May 2, 2008. San Francisco Unified School District, Demographic Analyses and Enrollment Forecasts Report, July 2002. San Francisco Unified School District, Final Report & Resolution of the Board of Education For Surplus Space and Real Property, May 8, 2007 ("Final Report"). SF Schools to Market 8 Properties, San Francisco Business Times, May 2, 2008. See, id., San Francisco Unified School District, SFUSD Description of Property by Parcel Number (Revised), September 2008. See Resolution 56-14A9 (8/23/05) ("Feasibility of Selling, Leasing or Subleasing Surplus Real Property") (attached hereto as Appendix 2); Resolution 53-22SM1 (5/22/05) ("School Consolidation Policy" outlining criteria to guide school closures). Final Report at 1. Final Report at 1. Final Report at 1. Final Report at 1. See Cal. Educ. Code Sections 17455 through 17484. San Francisco Unified School District, Draft San Francisco Unified School District (SFUSD) Evaluation of Potential Surplus Sites, January 2009. The fees, generally referred to as "school fees," currently amount to $2.24 per square foot for new residential construction and 27¢ per square foot for new commercial construction. See Gov. Code Section 53080. See, e.g., Save Our Child Care Center- NOPNA 12/16/2008, http://www.nopnawiki.org/index.php?title=Save_our_Child_Care_Center. Three examples make clear the consequences of the SFUSD's failure to establish and move forward with a general plan: SFUSD officials acknowledge that the Font Street property recently could not be sold because SFUSD could not move quickly enough. SFUSD neither could get the top price when it was possible nor could accept a lower price once prices dropped in a dynamic market. Assemblywoman Fiona Ma had introduced legislation to remove some of the limitations on use of the funds acquired by sale of SFUSD real property. This legislation now is dead in committee. Some SFUSD personnel would delay sales until this legislation is passed. SFUSD continues to mull over numerous proposals that come to its attention. Land swaps with the City have been proposed that could offer the SFUSD significant advantages. Similarly, SFUSD should be actively pursuing proposals to develop housing for teachers. In the absence of a long range plan, these opportunities tend to be studied multiple times and, over the years, simply evaporate. During interviews with SFUSD personnel, they pointed out that some basic issues must be addressed when selling surplus property. For example: Care must be taken that property is properly designated surplus under the law. It is difficult to purchase real property; thus, before selling real property, SFUSD must be reasonably certain such property will not be needed in the future. Individual neighborhoods (e.g., the Mission Bay District) may not follow trends predicted in otherwise-accurate demographic reports; accordingly, the SFUSD should be careful not to sell real property in growing neighborhoods. There are significant limitations regarding the uses of money from sales of real property. Nevertheless, each of these problems had been addressed at great length before the Board of Education adopted the Final Report of the Advisory Committee and before the CBRE Report was completed. These issues should not prevent SFUSD from selling the properties identified in these documents. Moreover, these concerns should not, in any event, prevent the SFUSD from adopting a long-range plan for the sale or lease of its additional surplus properties. See Mayor Gavin Newsom, City and County of San Francisco 2008 State of the City, http://www.sfgov.org/site/uploadedfiles/mayor/PressRoom/NewsReleases/01%20-%202008% 20SOC%20Education.pdf, slide 24; Office of the Mayor of San Francisco, 2008 City and County of San Francisco State of the City, Education, http://www.youtube.com/watch?v=JWfIBw0ICYM. See Jill Tucker, Newsom Boosts Rainy Day Cash for Schools, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/03/11/BAJ516CT98.DTL&hw=tucker+rai ny+day&sn=001&sc=1000; CBS5.com, SF Releases Rainy Day Funds To Keep Teachers, http://cbs5.com/local/San.Francisco.teachers. 2.974734.html 20 See Mayor Gavin Newsom, City and County of San Francisco 2008 State of the City, http://www.sfgov.org/site/uploadedfiles/mayor/PressRoom/NewsReleases/01%20-%202008% 20SOC%20Education.pdf, slide 23; Office of the Mayor of San Francisco, 2008 City and County of San Francisco State of the City, Education, http://www.youtube.com/watch?v=JWfIBw0ICYM. . . . . . . . . . . . . . . . . . . . . . **