5 p.m., Aug. 25
UT San Diego's sale of the North County Times campus in Escondido in limbo
Well after the 90-day escrow, the charter school has yet to obtain a permit or funds for the campus.
It didn't take long for Doug Manchester and John Lynch to start selling assets that came with the $12 million purchase of the North County Times in September 2012.
Unfortunately for them, it's taking a lot longer than expected to collect on that investment.
In a October 27 UT San Diego article, the company announced the sale of the North County Times campus in Escondido to the Classical Academy charter school for $7 million.
That agreement, however, has hit some snags.The expected closing date has come and gone. Nearly one month has passed since the 90-day escrow period expired and the school is without the necessary permits or the cash needed to seal the deal.
Representatives from the UT were not shy about stating the importance of timing.
This from the purchase agreement between the UT and Classical Academy:
Buyer and Seller acknowledge and agree that time is of the essence to this provision and that the time deadline set forth in this section 6.3 for the closing date and strict compliance therewith constitue a material part of the consideration to seller and buyer for this agreement.
Obstacles, however, need to be overcome before the sale is finalized. First, the Classical Academy High School needs to obtain a Conditional Use Permit from the City of Escondido. .
City planners say they are still months away from making a decision. That, despite lobbying from UT San Diego representatives.
"We would like to express our consent to Classical Academy High School’s application to request a [permit] for the property, and any related land use entitlements or City applications for use of the property for a school-- which they have started now that the property is in escrow with our company," wrote UT's Ryan Kiesel to a city official in Escondido on November 5.
The reason for the hold-up is the location of the property. Having a school in downtown Escondido will be an obstacle for alcohol-related businesses to move into the area.
"Any request for a new alcohol license within 600 feet of a school falls under a "consideration point" with [the Alcohol and Beverage Control board]," wrote Bill Martin, Principal Planner for the City of Escondido, to city officials in a November 8 email obtained through a public records request. "The point is that a future wine tasting room with off-sale [business] could have difficulty getting a license because of the proximity to the school."
Despite the setback, the planning commission will consider the issue at an upcoming meeting, but that is at least one month away from happening.
"The project application is technically incomplete and the environmental review is still under way," writes Martin in a January 2 email. "Once the environmental documents are complete, a minimum 20-day public review will be required before the project can go to the Planning Commission. This means a Planning Commission hearing likely will not occur until late February or March."
The second delay; finding the $7 million to pay for the 4-acre property.
Officials from Classical Academy says they plan to pay for the property with state revenue bonds.
"The funding for this facility will come from revenue bonds, secured by our existing State funding allocation, not a new obligation on resident property taxes," wrote Michelle Stanley, director of communications for the Classical Academy in a December 3 email.
"We have not signed an agreement with an investment agency at this time to secure bond financing. Be assured, the Classical Academies will not participate in any type of capital appreciation bond scheme seen with other districts that have borrowed millions and will have to repay $26 for every $1 dollar borrowed."
The California School Finance Authority has granted the Classical Academy one bond but it is for their charter school in Oceanside.
This is the agreement for school in Oceanside for $14,285,000 to Coastal Academy Charter School, Inc. (Borrower) Coastal Academy Charter School, Inc., a charter school operated under the same name, a California nonprofit public benefit corporation. Not to exceed $16,000,000 January 28, 2013. The bond proceeds will be used to (i) acquire a new site in Oceanside, California, and (ii) construct a new facility consisting of two buildings. Coastal Academy Charter School, Inc. anticipates an occupancy date of January 2014.
There is no record of any bond for the high school in Escondido.
One thing is for sure, the school doesn't have the money in reserves. According to the school's 990 tax forms, in July 2011 the Classical Academy High School in Escondido ended the year with $229,251 cash on hand. The charter's K-8 school had more cash, reporting $1.4 million in assets at year's end.
But Classical Acadmey will have time to find funding while it waits for the City to consider the conditional use permit. As of February 4, there has been no progress to report. "To date, the transaction is still in limbo and we are still in escrow," writes Stanley. "I know that we are still in talks with the City of Escondido regarding approvals and permits, but to date, there is no new information to share."
In an email, John Lynch, CEO of the UT San Diego, said he did not wish to comment on "private business transactions."
More like this:
- $37 million school bond deal to finance Manchester's sale of North County Times building — May 22, 2013
- UCSD exec, ex-politician each receiving annual $5,000 from La Jolla non-profit — April 26, 2013
- San Diego city council surrenders in costly Catholic school case — Feb. 17, 2013
- U-T sells North County Times Escondido site — Oct. 27, 2012
- Escondido City Council Makes Way for New Ballpark — Nov. 18, 2010