Sweetwater Union High School District's L Street property
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When the Sweetwater Union High School District held its May 28 meeting, three County Board of Education trustees were sworn in to fill seats vacated by indicted Sweetwater trustees. A fourth county trustee, Lyn Neylon, will be sworn in at the next meeting.

Lyn Neylon

Sharon Jones

Susan Hartley

Mark Anderson

The May agenda for new trustees — Sharon Jones, Susan Hartley, and Mark Anderson — was challenging. It included an item for additional funding for the district’s financial albatross — the L Street property.

The property was purchased, ostensibly for new district headquarters, in 2005 — just before district superintendent Ed Brand retired the first time.

The byzantine finance deal ties the L Street property to two other district properties and transfers the title for these properties to Plan Nine Partners Inc. The topic has been explored in previous Reader articles.

The status of this money pit was divulged, in 2013, when E2Manage Tech Inc, a company contracted by Sweetwater to manage the district real estate, produced a report that states: “The district purchased the L Street property in 2005 at a price that exceeds the current value of the property by approximately $12 to $15 million.

"Since purchasing the L Street property, the District has been making interest only loan payments to its lender and it is estimated that over $6 million of expenses have incurred.” The L Street property is now being audited by the IRS. At the time of the real-estate deal, the district entered into an agreement to pick up the attorney fees for Plan Nine Partners and California Statewide Communities Development Authority (the bonding entity).

Attorneys for the district are also racking up bills for the audit.

The district has already been invoiced by Best, Best & Krieger for $47,756 for IRS work done on behalf of the bonding agency.

The L Street property encompasses district offices and several for-profit storefronts. According to Brand, the IRS needs to be assured that at least 70 percent of the property is utilized by a nonprofit agency (the district).

The May 28 discussion on the dais reflected the difficulty the new boardmembers faced. Several of them asked for more clarification — or asked for a full presentation of the district’s asset management.

Trustee John McCann described the land deal as “bad,” and Brand characterized it as so complicated that the IRS was asking the Sweetwater staff to explain it.

Brand urged the boardmembers to approve the agenda item, as it was a step toward “unwinding” the property agreement.

In the end, the newly formed board voted 3-1 to pay the attorney fees. Mark Anderson voted against the measure.

The Reader has attempted to contact Anderson via his San Diego Office of Education email address, but he has not responded.

Brand announced that he intends to retire in October. Critics are wondering if the district will be left holding the L Street bag.

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bbq June 10, 2014 @ 12:45 p.m.

Thoughts of a Meeting

Contrite, a word meaning “sorry, remorseful, ashamed…”, something I never thought I would say about Ed Brand, however on May 28, 2014 at the Sweetwater Union High School District Board Meeting during a statement by Dr. Brand, he almost got there.

Item K-1 on the Sweetwater agenda involved a part of the twisted Real Estate Mess that is “L” St. The item was for Board approval to join (Pay for) legal defense against an active IRS audit of the Bond Issue used to fund the “L”St Property. We would be joining Plan Nine Partners, PNP, to defend the Tax exempt status of the bonds, (This is a big issue if you are an investor, and a creditability issue for the District).

During the discussion Dr. Brand finally said that this would be the first step (of about 20) in resolution of the Mess created in 2005 when He and the sitting Board (including Mr. Cartmill) decided that Real Estate speculation was in their Job description.

As reported before in other articles a failed joint venture with regards to zoning and development with the city along with an ill-advised Buy-Lease back deal with PNP, left the district holding the bag and paying excessive fees to PNP, ownership of the property is still a bit of a question.

At the meeting, Dr. Brand actually admitted that with hind-sight it was not a great thing to have done, wow where did that come from? Perhaps the House of cards finally shook enough to make realize the mistake, or that the new Board members might really ask some harder questions, but it really doesn’t matter.

Dr. Brand you finally did what many of us have been asking you to do since the “L” St. debacle started about 3 ½ years ago, admit you made a mistake in 2005 with the purchase, be open to the public about the plans to market 3rd St, 5th St, and ‘L” St. properties in order to finally buy the new Administration Complex in Eastlake. I for one might have been upset but at least with understanding of the overall goal.

Dr. Brand, I am hoping that your final few months prior to retirement will find you taking time to:

  • Repair the holes in the public’s trust in the Sweetwater Union High School District.
  • Push for completion of the Facilities use Studies,
  • Explain the 2014-2015 Budget Spending vs. Revenue,
  • Lay some ground work to beef up the academic programs at the ¾ of our Schools in academic crisis.
  • Explain the uses and disbursement of funds.
  • Develop a schedule and plan to put to rest deferred maintenance issues, especially those at the Mello Roos School Facilities (the funding is there, fix the properties).

Please, leave the district in a condition, that it can rise again for all of the schools and all of the Students.

BBQ

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oskidoll June 10, 2014 @ 1:28 p.m.

Thank you so very much BBQ for your excellent outline of the real estate 'mess' that is the Sweetwater District. For the first time I may be able to actually understand the machinations that led to this perverted fiscal situation. So much for board leadership of any of the former five (Cartmill and McCann included) and their hired gun, Fast Eddy. Seems he wasn't quite fast enough now, doesn't it?

Thank you also BBQ for outlining most of the other 'issues' that continue to plague the Sweetwater District. Do wish Judge Espana would consider this horrific legacy left by those she seems to favor with little or no punishment for their crimes against the citizens of the South County.

"Film at 11" as they say in the news biz.

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oskidoll June 10, 2014 @ 4:37 p.m.

Thanks are also due to Susan Luzzaro for writing a well-organized piece to bring us all up-to-date on the status of the real estate fiasco in Sweetwater.

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shirleyberan June 10, 2014 @ 3:17 p.m.

Just when Brand had to go (1st time) 2005 -before he could be investigated when he was going to be, is documented: L Street and 2 Other Properties Were Transferred by Title To Plan Nine Partners Inc. From School District Funds Is Now - e2Manage Tech Inc. (Co. to manage taken,TITLE to Ed and 9 Partners real estate group) audit says ... Get the money back from Ed and all of his partners in crime. Don't let it go!

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shirleyberan June 10, 2014 @ 3:23 p.m.

Brand is only sorry he's being caught. How long has the theft been going on from you guys, 15 whatever, my experience is fraud longer than that.

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eastlaker June 10, 2014 @ 3:31 p.m.

From the headline, I couldn't tell which money pit this would be about! There are far too many.

Yes, bbq, excellent examination of the problem of L street and the other problems. But--do we know "who holds the paper"? anniej started asking that question some time back, and it has been repeated by many, but we have yet to hear the answer. Shouldn't that be public knowledge?

What if some of the familiar names are involved in this? Are they trying to keep something quiet? I think I know the answer to that question.

Yet...with all the gargantuan messes in Sweetwater, what do they do but give out a press release about the new athletic hall of fame...read all about it in the Star-News. It takes real guts to ask the public to contribute to another Ed Brand boondoggle, while we don't even know the depths to which we are under water in all the other real estate fiascos. Can anyone look me in the eye and tell me this isn't rather conspiratorial? Why bring back Ed Brand? Because he is the prime mover in the Sweetwater mess, perhaps?

Why send things down to Chula Vista and Espana? Because that would ensure the real dirt would remain hidden?

This whole thing is so completely sickening. Wrath. Vengeance. Justice. There is supposed to be some sort of cycle that allows for the public to be brought back into a state of equilibrium, but it certainly isn't happening here.

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Visduh June 10, 2014 @ 4:10 p.m.

Isn't Brand coming off here as if he is a victim of the scheme, rather than a perpetrator? He can now say it wasn't a great idea, but what did he think at the time, and just whose idea was it in the first place? Who pushed it through? And who has been covering up the details for years? I fear that the answer to all the above includes or is limited to Brand. For no other reason than this, he should be fired immediately for cause.

School districts are set up to run schools, not make killings on real estate. A scandal a decade ago in the Capistrano district that brought down an administration and resulted in school trustee recalls centered around real estate speculation. The supe there was going to make a killing by building a new district headquarters twice the size that it needed to be, and then rent out the excess space.

But more recently, the little Encinitas district managed to make a killing on the old Pacific View school site, as reported in the Reader. They went nose-to-nose with the city, and the city blinked and bought the property for many millions of dollars it doesn't have to spare. Crime does pay if you are patient and get the voters wanting to waste their money. So, now that city is poorer and its school district is richer than before, and the effects will be felt for many years.

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shirleyberan June 10, 2014 @ 4:16 p.m.

Visduh - the district is defrauded. I know Brand very well. It was blatant disregard.

4

shirleyberan June 10, 2014 @ 4:30 p.m.

Seriously, you have all seen pompous-bully-ed. Stop excusing him, or them, it's not OK. It's outrageous. But if judge know-nothing-do-nothing eventually sees the property transfers, she'll congratulate them for how clever.

4

joepublic June 10, 2014 @ 6:29 p.m.

Ed Brand says he wants to "unwind" what trustee McCann calls a "bad" deal. However, acquiring a building to house new district headquarters in eastern Chula Vista is another bad deal, especially for the people living in Imperial Beach, National City, and western Chula Vista. The L Street property is at least centrally located and more accessible. Of course, this district has never wanted to make it easy for the public to attend board meetings.

4

Visduh June 10, 2014 @ 8:18 p.m.

Susan has done us a service in posting "mug shots" of the four new trustees. Anyone seen anything of them, or heard anything of them until now? (I didn't think so.) So, this Ms. Nylon (er, Neylon) with her attempt to look like Heidi Klum, was the no-show at the first meeting. Was there any excuse for her absence, other than the usual "family commitment" or some such? Like it or not, these four will have to take control, or forever after have to make excuses about their dereliction. But who pays any attention to the CBOE? Oh, yes, we vote for them, but know nothing about them. Are any of them in any qualified to be on a school board? Time will tell what they are willing to do. This district isn't just another one that had to have county trustees step in. Sweetwater is in crisis, and crisis demands action. We shall see what they are capable of doing, and whether they are ready to act.

5

Susan Luzzaro June 10, 2014 @ 8:34 p.m.

Visduh, I self-identify as a utopist. I continue to hope that the ship will right and that the CBOE appointees will ask more questions than many of the former (and present) trustee(s).

Are there only two sides to a coin? Is my other side a dystopist?

4

Susan Luzzaro June 10, 2014 @ 8:37 p.m.

I just remembered: u=no topis=place, or something like that.

4

anniej June 10, 2014 @ 11:39 p.m.

Mello participants - I would like to bring to your attention the following - this evening, at a SPECIAL BOARD MEETING it was announced that the District has every intention on raising the Mello tax retroactive in the amount of 2% and then slapping on an additional 2% next year. Also, they intend on levying a 2% fee on Developers - and who do you think will bear the brunt of those additional Developer fees? Well, that would be the new home owner.

If this is approved we can all send the following sentiments - THANK YOU JOHN MCCANN!!!!!!!

Please forward on to all that you know that pay Mello, ask that they attend this months Board meeting to join all in sharing with Mr. McCann 'this is but ANOTHER' reason why you would be dangerous on the CV City Council and we will NOT be voting for you.

just my opinion

6

eastlaker June 11, 2014 @ 9:59 a.m.

Interesting. I was told that Brand and henchmen didn't raise Mello-Roos during 2013, for the first time in forever. So, we got one year with no increase, is that right?

We pay more and more so Ed Brand can steal more!

5

bbq June 11, 2014 @ 6 a.m.

Interesting discussions going on, in my first statement I was trying to combine the issues and methods of the SUHSD Adminstration with some tongue-in-cheek humor about Ed being humbled by this bad deal.

I go back to a statement from Ms. Michel about arbitrage, (the use of government funds solely to invest it to make money with it). How is the "L" St. real estate scam not arbitrage? Ed himself said that they only bought it because they could not see the value ever going down....

What were the original intentions/plans for the three properties bundled together with a behind closed doors discussions with the city to modify the zoning? The information that has come out about this is as many of you think only a scratch on the surface. I too believe that this runs much deeper than is evident at this time and the Friends of Ed will regret their participation.

So as we continue to track this issue what of the undiscovered issues, and the known issues that affect the district that are not being pushed and followed?

I call the current and recent past Adminstration and Board management style, "Crisis Management" which by my experience is if management keep enough things in turmoil no one will ever know what they are doing or that they don't know what they are doing.

We can only hope that the temporary Board can cool the jets of the outgoing Superintendant, keep the district from overspending it's budget and place some temporary restraints to only act on items to keep the district running.

BBQ

5

eastlaker June 11, 2014 @ 11:52 a.m.

Does the temporary board have the gumption to really look into things and reign in Brand? Supposedly Brand has friends everywhere, which would explain why he isn't already behind bars.

4

eastlaker June 11, 2014 @ 12:13 p.m.

And yet, Brand does not seem to have any 'public defenders' as it were...his friends must want to keep that side of things private. Hmmm. Why would that be.

4

oskidoll June 11, 2014 @ 10:40 a.m.

It is clear to me that Ed Brand is a con artist's con man, leading the greedy trustees (McCann, Cartmill, Ricasa, Bertha, Quinones, Sandoval et al) wherever they let him take them down the primrose path of bad decisions for personal gain.

I suggest the 'interim' board members insist on a moratorium of any more fiscal actions (except those absolutely necessary as a minimum to keep the district functioning) until Fast Eddy is gone and a 'real' board is seated in December. Otherwise, there will likely be yet more sleight-of-hand shell games to further line Fast Eddy's pockets. Take a look at the revealing numbers provided in Jaime Mercado's post....sigh.

By the way, I see in a news report from the Inland Empire that Greg Sandoval has resigned from his $151k job as VP of Student Services at Moreno Valley College, probably in anticipation of the action that district would like take as a result of his guilty plea. Judge Espana doesn't have standing to intervene there, or she might have tried to save his butt there, too. Ricasa demoted at Southwestern shows that organization also is paying some attention. Good for them!

5

eastlaker June 11, 2014 @ 12:23 p.m.

So, if many people are reaching the conclusion that Ed Brand's role in all of this is far from unwilling participant, or observer, or even partner in crime, but something far more along the lines of CEO in charge of Expanding and Extending Fraud, Waste and Abuse in Sweetwater...why didn't any of those charged actually state what was going on?

Pearl Quinones said to me once, that "Dr. Brand never told me how to vote".

So by what means did he maintain his hold on the board, and how does he still maintain his hold on these former board members? Is Brand still in a position to offer favors/jobs to those who refrain from telling the truth?

4

Visduh June 11, 2014 @ 3:31 p.m.

It would be lovely to think that even in smog-choked Moreno Valley, the college district would actually pay attention to what was going on with one of its execs. When was he hired there? Before or after the indictment? So, if he's losing his job and fat paycheck there, he might not be able to find another such slot anywhere in this state. Of course, there's always the Rio Grand valley of Texas, and he'll probably be welcome there.

Yes, if the judge could help him out, she would try. (Who knows? She may have already written a letter on his behalf.) If there were real justice, none of them would ever be eligible for employment in public education again, in this or any state. Better yet, they should be virtually unemployable in any part of the public sector, and private sector employers should also look askance.

4

oskidoll June 11, 2014 @ 1:24 p.m.

It seems to me that Brand didn't need to 'tell' Pearlie, or others how to vote...they went along with whatever he put on the agenda. If it were otherwise, they would have asked lots of questions about district business and there is little evidence any of them actually cared what was on the agenda.

It also seems to me that, the corrupt board members, were politically astute enough to know that with all that bond money, Brand would be useful in 'helping' them get reelected and garner other favors. I think there is much Brand could 'share' with the DA and the public about the connections he greased to help them in their efforts to garner contributions from the prospective vendors.... we do know that Brand testified that McCann asked him to help raise campaign contributions, don't we? It is likely a quid pro quo....Brand keeps quiet about what he 'did' for the board members, and they kept him employed with big salary, and let him do whatever he wanted with District resources. I suspect there is yet much unrevealed that none of them want made public.

I also believe that Brand's henchpeople are controlled by the same process...they get to keep their jobs in return for their silence. It is a dirty cabal and Ed is still in charge.

5

oldchulares June 11, 2014 @ 1:28 p.m.

Why is this new group allowing more of our money to be spent on a failed real estate deal? Has anyone told them the IRS is auditing the deal?

6

bbq June 11, 2014 @ 2:09 p.m.

It seemed to me while I sat getting more frustrated with the shinanigans of the District, that the new Board Members were lulled into believing that the $47,000 bill was a must have or time sensitive decision to prevent/prepare for "unraveling" the "L" St mess (First step of 20 or so steps according to Ed).

I am sure they did not have a clue to what was really going on or how it will affect the future but, remember they asked for time to get up to speed....

As for Special Meetings and Mello Roos Taxes, the district (Ed) continues to play business as usual, take the money before you know how to use it. If there were a clear plan for paying down Bonds, Maintaining the schools and fixing the over crowding issues in the Mello Roos facilities, it would not be so aggravating...

More food for thought on how a "Real District" could/should function....

BBQ

6

eastlaker June 11, 2014 @ 5:12 p.m.

All the 20 steps no doubt arranged by Fast Eddy with the intent of creating something difficult to unravel. He makes money every which way the deal goes, it seems.

We have got to be able to stop that. And stop him.

5

oskidoll June 11, 2014 @ 5:07 p.m.

Susan: There is a post dated My 23 on the same blog.pe.com by Brian Rokos stating that Sandoval has submitted his resignation effective June 20.

5

Susan Luzzaro June 11, 2014 @ 7:23 p.m.

oskidoll, thanks for the update. What I like about the older story is the third paragraph from the bottom. It makes me think about how this whole thing might have played out differently in front of a jury...I wonder, too, if the community might have been more involved.

5

oskidoll June 11, 2014 @ 8:01 p.m.

I agree with you Susan. The outcomes would likely have been much different if the corruption cases had been allowed to go to trial...

5

Visduh June 12, 2014 @ 10:54 a.m.

I'm not sure I agree with that. The judge has a great deal of discretion in what is entered as evidence, and she could have suppressed so much of it as "hearsay" or something else inadmissible, even if it were not the case. You are assuming the deputy DA trying the case would have really put forth his best case, and about ALL the charges, not just one or two. Then at the end of testimony, the judge can be approached to dismiss charges based on the prosecution not having made its case at all. This happens, but judges do not do it that often, and they do it only in extreme cases. I'd guess that there was a good chance she would have done everything possible to tilt the cases in the direction of acquittal and leniency. Then there's the ever-present doubt that a decent jury could have been empaneled, given that it would draw from the same electorate who put those people in their positions and kept reelecting them.

4

anniej June 12, 2014 @ 7:58 a.m.

oskidoll, Ms. Luzzaro - as always your points well taken.

Allow me to digress - interest, educated on the issues and choices.

Interest- there is little interest in anything outside of the majorities personal and family lives. If it does NOT directly affect the proverbial 'me' - I am not interested.

Educated on the issues - few, if any take the time to read a/any newspaper, listen/watch radio or tv news shows, or attend/listen to the audio of a Board meeting. In fact, there are really few news organizations that present facts. Here in San Diego we have The READER and small papers such as The Star News or The Patch who make a valiant attempt of presenting facts and data. The largest paper in our fair area full of fluff - one sided rhetoric. I don't want fluff - I am one of those 'WHERE'S THE BEEF' KINDA OF PEOPLE.

Choices - when entering my little cardboard box of a voting booth recently and I began to fill in my eggs with my black pen I found myself staring thru the ballot and wondering 'you call this a choice'? Where are the Jaime Mercado's? You have heard of persons like him 'people that are there to serve and not use'.

So, maybe that is what is needed - interest, self education on this issues and choices.

5

erupting June 12, 2014 @ 7:59 a.m.

This temporary board is not informed enough to start making financial decisions that have a long term effect on this community.. The second interim financial report was a necessity no one disagreed with that. But stepping into the Lst. debacle is another matter. After the meeting I felt like we we're being dismissed. Thes new members treated us like uninformed hysterics. This was not what I expected. I guess we will see at the next mtg. It's a shame they are getting into things they know nothing about,instead of leaving this to a new voted in board by this community. Unfortunately I think they are drinking the Brand and McCann koolaid. There was a group of people that wanted to present issues about the open boundaries and their Mello- funds paying for the now severely over crowded schools in Eastlake.It appears the district is saying that all of our schools are over crowded to disguise the truth. I heard they are going to look for legal recourse instead. What a mess with no relief in sight. Another board that only says yes.

5

eastlaker June 14, 2014 @ 9:03 a.m.

I propose that SUHSD undergo a name change to "Boondoggles 'R' Us, where your education means more to real estate interests than it does to you!"

4

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