Sweetwater Union High School District is selling off the family jewels — the district property — but where is the transparency? And is former superintendent Ed Brand still the prime mover on property deals?
Sweetwater has two pieces of asset property — Fifth Avenue and L Street — that are in the process of gaining entitlements, then they’ll be sold to a condo/apartment developer.
A third property, Third Avenue, is entitled for a multi-family development called the Colony. Board president John McCann and four interim trustees voted June 30 to put the property up for sale.
A recent U-T ad announced that the Third Avenue property, which was at one time slated to be Sweetwater’s district headquarters, is going for (a minimum of) $7,000,000. Bids must reach the district by 1 p.m. on July 31.
The Reader has already reported on problems with the committee that declared Third Avenue “surplus.”
Here’s another question: Will the consultants (E2ManageTech) who are doing the entitlements for the properties get one-third of the cut from the sale? If not, why did the district’s 2011 interim deputy superintendent of operations, Diane Russo, sign a proposed agreement to that effect?
Here is an excerpt from the 2011 signed proposal: “BRG [e2managetech] will share in one third of the net cash savings of each of the Asset Properties or related transactions after the Asset Properties are sold. Furthermore, BRG will have to approve the ultimate sale disposition of the Asset Properties.”
The three consultants who signed the agreement with Russo are: Chuck Diamond, Daryl Hernandez, and Vince Scarpati. Though each comes from a different business group, they are doing business with Sweetwater under the name e2Managetech.
Tom Calhoun, Sweetwater’s executive facilities director, forwarded the participation agreement proposal, which gives the consultants a big piece of the pie, to the Reader. It was attached to a project agreement Calhoun said was in effect.
Calhoun said the participation agreement has never been in effect. On June 30, Calhoun wrote: “Ms. Russo's signature is not adequate to bind the District and the item was never approved or ratified [by the board]. The other signatories are not District staff, but may have been from the consultants company.”
But why does Calhoun refer to signatory Chuck Diamond like some distant cousin, who may have been from some consultant’s company? Diamond is the district’s public face on these projects. He works with the City of Chula Vista on entitlements and presents the projects to the public — tasks which are described in the disputed participation agreement.
Nevertheless, Calhoun is adamant: “The District will not be providing 1/3 of proceeds to any entity. When the Third Avenue property sells, the proceeds will be going to defease the outstanding Variable Rate Demand Revenue Bonds on L Street minus a 2% broker commission to VRES [Voit Real Estate] per the Board Resolution passed on June 30, 2014.”
The Reader contacted consultant Chuck Diamond on July 7 to find out if he believed the Participation agreement was in place. When previously approached in March 2013, Diamond declined to be interviewed on orders from the district. He declined again on July 7:
“Notwithstanding Dr. Brand's current employment situation, I will continue to operate under the previously established policy that you mentioned unless instructed otherwise by the designated Superintendent. To this end, I respectfully need to say that I will not be interviewed nor answer your questions.”
This group has been paid $82,500 three years in a row out of the district’s pocket.
Even more fascinating is that when Diamond replied to the Reader, he copied former superintendent Ed Brand, who had been on administrative leave since June 30. Diamond did not copy Sweetwater’s new superintendent, Tim Glover.
The Reader then sent a query to another e2managetech partner, Daryl Hernandez. Just a few months ago, on March 3, Hernandez emailed former superintendent Brand:
“Ed, In response to your request to revisit our Participation Agreement, please find the attached letter. We would be available to further discuss this issue next week at your convenience.”
How can you “revisit” a participation agreement if there isn’t one?
When Calhoun was asked about Hernandez’s email, he answered: “Susan, there is only one Participation Agreement that I know of and don't know why it was attached [to the agreement in effect] since it never went to the Board for approval. I have discussed the District position with the consultant [Hernandez] on several occasions.”
The district got Hernandez’s tongue, too.
On July 9, Hernandez wrote: “Susan, I’ve been instructed to forward all media requests to the district.”
Then the Reader asked the new superintendent, Tim Glover, to release the gag order on the people who are handling the district property.
But Glover handed my request over to Sweetwater’s communication and grants director Manny Rubio who wrote:
“As I'm sure you can imagine, [Glover] has a lot of requests on his plate right now and is working diligently to be brought up to speed on numerous issues. This includes any and all details regarding district properties and the role that Mr. Diamond has played. Once that happens we'd be happy to share his direction on the situation.”
District business continues to be conducted behind closed doors.
On June 30, four interim trustees and trustee John McCann voted in closed session to lease a piece of property on the eastern side of Chula Vista on Harold Street for new district headquarters.
Sweetwater trustee candidate Chris Shilling has made this action part of his platform.
In a July 2 press release, Shilling, who has two children in the Sweetwater Union High School District, and is a member of the City of Chula Vista’s ethics committee, called for the board “to immediately reverse their decision to approve a 10-20 year lease for new district office space at 860 Harold Place.”
Shilling, who attended the June 30 meeting, wrote to the boardmembers: “This process did not represent the respectful, collaborative, and transparent actions that the public expects. These long-term decisions should be made by elected boardmembers who are representative of our community.”