New Document
Opinion: Funny business with school district properties by Gary Earle
February 5, 2006 7:04 AM
The math just isn't adding up at the Santa Barbara School Districts.
Funny business has surfaced in the contract the school board has signed
with its real estate consultant, UniDev LLC.
Through
a feasibility study, this Maryland-based development company is
advising the board regarding the use of its vacant land holdings, which
include the Tatum property in the Eastern Goleta Valley and another
parcel in the Hidden Valley area. The school board has paid UniDev a
$150,000 fee for its land-use expertise.Phase one of the study
had UniDev conducting a survey among school district employees to
determine the desirability of developing the properties for housing to
be sold to them at below-market prices. UniDev presented the completed
study to the board last week, with results showing high demand among
district employees for such a perk.However, under questioning by
school board member Robert Noe-l, UniDev Vice President Peter
Smirniotopoulos revealed that UniDev has a financial stake in the
results of the survey. It turns out that if the school board decides to
go ahead with the construction of housing on the properties, UniDev
stands to be the most likely developer of the homes and will garner a
fee of 6 percent of the development costs in the process.Mr.
Noe-l quickly pointed out such a conflict of interest is unacceptable if
the survey results and the development process are to have validity.What
Mr. Noe-l didn't mention is that UniDev has an even more egregious
conflict of interest under another provision of the contract. This
section calls for UniDev to provide the district with options for
maximizing the value of the properties. One alternative is to rezone
the sites for high-density housing. This issue is a real hot button in
the neighborhoods surrounding the properties, as residents fear the
tremendous impacts from densities as high as 20 or more homes per acre.This
arrangement between UniDev and the Santa Barbara School Districts is
highly prejudicial to the residents of the Goleta Valley and Hidden
Valley, the two communities surrounding the properties in question.
Since UniDev will receive a fee of 6 percent of the development costs,
its executives would have motivation to skew their evaluations in order
to favor the sites being built to the highest possible densities. The
higher the density, the higher the development costs, the higher the
fees to UniDev.Taking the Tatum property alone, should it be
built out at the upper end of its maximum density, development costs
could exceed $60 million with a fat fee of more than $3.6 million going
into UniDev's coffers.Another multimillion-dollar paycheck could
await UniDev in Hidden Valley. It's unknown whether the school board
has calculated these numbers, but you can be sure UniDev has.The
school district is a public agency managing public properties. The
school board has entered into an arrangement with inherent conflicts of
interest that are in opposition to the best interests of the
communities surrounding the district's public properties.Superintendent
of Schools J. Brian Sarvis should take immediate steps to cancel the
board's contract with UniDev and rethink its approach to determining
the future of these community assets.The public's well being and
best interests must supersede developer profits. Citizens demand that
our public officials conduct their business in no less a manner.The author is president of the Coalition for Sensible Planning.