Public records have shined a light on who may be behind this property swap. JPR鈥檚 Roman Battaglia recently discussed the story with North Coast Journal News Editor Thad Greenson.
Roman Battaglia: So for those who don't know, could you tell us about this $6 million land deal between the Eureka City Schools Board of Trustees and this mysterious company? What's made it so controversial?
Thad Greenson: Eureka City Schools has a long defunct junior high property, the Jacobs Middle School site. It's about 14 acres, and it has been looking to offload the majority of the site, about eight acres of it, for some years now. So it declared it surplus property that had been going through the very regimented surplus property sales process. And in heavy negotiations with the California Highway Patrol, which wanted to relocate its northern Humboldt headquarters to the site.
And then out of nowhere in December, the district pivoted and instead of selling the property outright to the California Highway Patrol, entered into a property exchange agreement with a mystery developer, an LLC that had just been formed a couple of days before, AMG Communities-Jacobs, LLC.
I think the deal is controversial for a number of reasons. One is that the surrounding neighborhood had been pretty excited about the prospects of the California Highway Patrol coming in. And then, I think it's controversial because inherently the deal is constructed in a way to sidestep the surplus property sales process, which as I said, is a really regimented process for government entities in California to offload properties. It gives preference to other public entities looking to take over those properties.
So what Eureka City Schools did is by structuring this as a property exchange, rather than outright sale, it alleviates all of those requirements for public bidding process and that type of stuff. But when you look at this deal, it's a $6 million deal, it includes an exchange for a really small residential property in Eureka. And then the bulk of the deal, $5.35 million, is just a cash payment. So it seems pretty clear that they didn't have much interest in this residential property. Really, this was a way to sidestep the competitive surplus bidding process.
RB: I think the big controversy behind this, partially, has just been the identity of who's behind this LLC. This company is unknown. But it sounds like recently, you obtained some emails from the City that shed some light on that. Could you tell us what you found in those?
TG: Potentially shed some light on that. So we requested a bunch of correspondences between the identified negotiator for the district, Fred Van Fleet, the former superintendent, and anybody affiliated with AMG Communities, including their attorneys. We got back a total of 246 pages of emails that were heavily redacted. Although, we realized that those redactions left a lot of the text that they intended to redact visible in the documents. So we were able to extract that text and review it and I think a lot of things were illuminated about the deal.
One, I'd say first and foremost is that our legal review and our attorney's legal review really determined that they redacted a lot of things that didn't qualify as exemptions under the California Public Records Act and should not have been redacted. But we were able to identify that at least the district attorney, the man negotiating on the district's behalf with AMG, was under the impression that they were negotiating with Robin Arkley, who is a prominent businessman locally.
RB: We don't know necessarily if it's related to Arkley or not. But the company that purchased the property, do we know what they plan to do with it?
TG: No, they put up a kind of a with some frequently asked questions and basically they're saying that they are going through a process to meet with stakeholders, talk to the community and figure out what the community wants and then will develop plans from there.
This interview has been edited for length and clarity.
