Instead of making money by selling off its land, San Diego Unified is trying out a new plan: making money by keeping its land.
Over the last few years, the district generated millions of dollars – and plenty of criticism – by selling off some of its most valuable real estate. One school board member likened the tactic of settling for one-time revenues to pay ongoing expenses to “selling your grandma’s jewelry to pay the rent.”
Community members also expressed concerns about how some of the properties slated for sale were going to be used.
Now the district, with the backing of the school board, is aggressively pursuing a different approach to generating revenue from underutilized properties that, if successful, would address both major concerns about the land sales.
San Diego Unified is seeking development proposals for so-called “joint occupancy” projects, where district properties would feature nonprofit or private uses, such as housing, while the district maintains ownership and its own uses. The projects would ideally bring in revenue from long-term leases, and create uses that have the backing of the community.
In August, the district issued a request for proposals for joint-occupancy developments at five of its properties. Earlier this month, the district started holding public meetings to hear what type of developments community members would like to see there.
The five sites on the table are:
• Fremont/Ballard Center on Congress Street in Old Town: This 4.39-acre site is home to a district parent center and the iHigh Virtual Academy.
• Scripps Mesa Conference Center on Spring Canyon Road: The 6.72-acre site is the former home of EB Scripps Elementary School and currently houses the Innovations Academy charter school, whose lease expires on June 30, 2016.
• Transportation Services Center on Cardin Street in Kearny Mesa: The 15.47-acre site is used as a bus yard, fleet maintenance center and administrative site.
• Barnard Asian Pacific Language Academy on Fogg Street in Pacific Beach: The 10.15-acre site also features an athletic field and is expected to remain home to the Mandarin-immersion elementary school.
• Revere Center on Gifford Way in Linda Vista: This is a former elementary school that houses some district administrative uses and has three vacant lots.
Midori Wong, San Diego Unified’s director of special projects, said the sites were chosen at two public board workshops held earlier this year.
The joint-occupancy approach, the thinking goes, would put the district on track to meet one of the goals spelled out in its Vision 2020 plan: to develop its properties as neighborhood centers that benefit the public.
“This effort is really about looking at district-owned sites and reimagining what we could put there that would serve the community and serve the core mission of the district,” said Wong. “It is also about providing stability for the district and looking at ways we can maximize the use of our properties to generate revenue.”
While it’s not a joint-occupancy project, Wong likes to point to the COMM 22 development on leased district land in Logan Heights. That’s where BRIDGE Housing and MAAC are redeveloping a four-acre site at 22nd and Commercial streets, a project that includes rehabbing a former district warehouse and new construction.
The project will feature a combined 252 units of housing, including affordable housing and live/work lofts. The leased land will also feature day-care facilities, retail and commercial space and streetscape improvements.
“This project has elements that we would seek in joint-occupancy projects – a long-term ground lease where the district receives rental revenue, the land uses developed through robust engagement with the community and a partnership formed with private investment to make the project a reality,” Wong said.
It should come as no surprise that Scott Barnett, the outgoing school board trustee who has been a vocal critic of selling off district land, supports joint-occupancy efforts. He said he first advocated for the approach a couple years ago as an alternative to land sales.
“It is a win-win,” Barnett said. “The district gets a new educational or community use we don’t have the funds to pay for and lease revenue for up to 66 years. The community gets its market needs met, whether that’s infill housing or a commercial development or something else.”
The funds from project leases could be used to pay for things like teachers, nurses and art programs, said Barnett.
It’s hard to estimate how much money such projects could bring in, though, since there are many variables up in the air, said Wong.
The projects are expected to take several years to complete, but the district will give “significant weight” to any proposals that provide a minimum up-front payment of $1 million.
The funds would offset the district’s costs in evaluating the proposals, and could be reimbursed during the terms of any lease agreement, according to the RFP.
The development teams chosen will ultimately be responsible for “the design, construction, operation and maintenance of the improvements and all costs associated with the project.” The district is seeking lease terms ranging from 26 to 66 years.
In its request for proposals, the district said it is open to a variety of joint-occupancy plans. They include new development, and rehabbing district structures for new purposes.
Meetings to solicit community feedback from community members near each site are under way.
At the meeting at the Revere Center in Linda Vista, attendees said they could envision the parcels being home to affordable housing, an urban discovery center and a children’s center for arts and music, among other ideas.
Those who attended the Barnard elementary meeting said they would like to see a cultural center, a family restaurant or a music pavilion at the site.
Barnett said in working with district staff, he tried to steer clear of sites with major liabilities or challenges – such as likely neighborhood opposition.
He said there is great potential for unique developments at each location, such as the bus yard in Kearny Mesa. Barnett said some Chinese businessmen envisioned transforming that space into an Asian commercial village.
“The opportunity we have is so exciting and so different,” said Barnett.
Wong said the responses from community members will be published online and could potentially be used for an addendum to the RFP. Final project submissions are due Feb. 2, and the board will meet March 10 to consider the proposals.
The board can select project proposals they would like to move forward, but none can be officially approved until the state Board of Education signs off.
San Diego is home to just one of nine joint-occupancy projects approved by the state in the last five years – a plan calling for the Peninsula YMCA to develop athletic facilities at the Pacific Beach Middle School property.
That project is on pause, though, because of a change in scope.
The Chula Vista Elementary School District has had two joint-occupancy projects approved by the state since the start of 2013. The South Bay Family YMCA is expected to develop community-recreation facilities at the Feaster Elementary and Camarena Elementary school properties.
Wong said more San Diego unified joint-occupancy projects are a possibility in the coming years, and school board records indicate that the district headquarters on Normal Street is one of the potential sites identified.
“Keep in mind that each joint occupancy project is a long-term effort that will take several years to develop and complete, so we will be carefully monitoring the first projects to evaluate feasibility of future endeavors,” Wong said.