My story today looking at a proposed infrastructure bond that could be revived under the new city attorney detailed the lease-leaseback arrangements used by many municipalities, including San Diego.

It’s not a practice that’s limited to cities and counties. School districts commonly enter into these agreements to build new campuses.

In these deals, a school district leases district-owned land to a developer for a nominal amount, usually $1. The developer builds the school and leases the building back to the school district, with the district’s rent payments making up the cost of the construction.

District officials say the method is a good way to speed up construction and keep building costs low. But it hasn’t always worked out that way, as North County Times reporter Stacy Brandt noted in a 2007 article. The story notes, for instance, that some Vista Unified School District trustees balked at paying cost increases for a magnet school being built under such an agreement.

Brandt says at least 60 schools in San Diego County have been built under lease-leaseback arrangements.


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