After almost eight months in escrow, the deadline ran out last week on a vacant middle school property the Eureka City Schools board had been looking to sell.
The district had been negotiating with the California Highway Patrol to purchase the property. But, at the last minute, they instead decided to sign a deal with AMG Communities-Jacobs LLC instead, in exchange for two small residential units and $5.35 million in cash. Some local groups have argued the school district violated state codes that outline how public entities sell off surplus property.
The school board voted last Thursday to deny any further extension of the closing deadline, essentially killing the deal.
Eureka City Manager Miles Slattery said he knew from the start that this deal was never going to go through.
鈥淚 can understand why the board made their decision, because of the significant benefits that could come from this," said Slattery. "But I knew the whole time that a publicly-zoned property for eight acres going for $5 million was absolutely ludicrous.鈥�
The potential developer, AMG Communities-Jacobs LLC, said in a statement that, "Our investors were willing to pay an above-market price for the property in order to provide as much benefit as possible to the School District. However, the strident opposition of several City officials, including certain members of the City Council, to efforts to rezone this site for family housing has created a political climate that is too risky for the size of investment needed to bring our vision for the Jacobs site into reality."
Slattery denied these claims, saying the city bent over backwards to try and help the developer. But the company was unresponsive.
鈥淚 have never had anybody buy even a property at a tenth of the value and not come to the city and ask about what those uses are allowed," Slattery said.
A representative for the LLC declined a request for an interview.
The identity of who is behind AMG Communities-Jacobs LLC isn鈥檛 publicly known. But, previous reporting from the revealed possible ties to Robin Arkley, a local developer who has poured hundreds of thousands of dollars into a local ballot measure to influence city planning.
Measure F would preserve parking lots in Eureka's downtown area that the city would like to redevelop as housing. It would also rezone the Jacobs Middle School property to allow residential and commercial uses. The LLC said that it will instead wait until the outcome of Measure F to decide whether or not to purchase the property if it's still available.
But, Slattery said that a ballot measure isn't needed to rezone that property.
"It's all under our jurisdiction, and we would have loved to change that zoning outside of public to some sort of housing designation or any sort of principally permanent use for housing," said Slattery.
Now that the deal is off, the school board could consider selling the property to someone else. It had previously been in negotiations with the California Highway Patrol to sell the building before this land swap with AMG Communities-Jacobs LLC.
