Would you sell your house to pay off a car loan that has a 1.7 percent interest rate?

By September 15th, California State Superintendent of Public Instruction Jack O’Connell is expected to sell 8.25 acres of Oakland Unified School District property—land that currently houses 900 students in two high schools, one elementary school, and two pre-schools. In addition, nearly 400 employees who work in District Administration offices will be displaced. The proceeds of this sale will be used to completely pay off the school district’s outstanding loan balance to the State of California.

Located in the Eastlake neighborhood district, between East 12th and East 10th Streets, and Peralta Park and 4th Avenue, this property will be sold to the TerraMark/Urban American joint development team to build 1,388 market-rate condominiums and 100,000 square feet of commercial space in five 35-story towers next to the estuary. These structures will be, by far, the tallest buildings in Oakland.

Under the proposed terms of the sale, the Oakland Unified School District will gross up to $60 million over five years, and earn an additional $1 million a year through on-going condominium sale “flip taxes.” The developers bear no responsibility for the costs of relocating five schools with 900 students and 70,000 square feet of office space with 400 employees.

Does this proposed sale best serve the mission of the Oakland Unified School District?

La Escuelita Elementary School, Central Infantil and Yuk Yau pre-schools and MetWest High School are currently housed on the property in temporary and sub-standard facilities. The playground for La Escuelita is a closed off street (East 11th). There are already more students seeking enrollment in these schools than their facilities can hold.

For the last ten years, the school district has promised parents construction of new facilities for La Escuelita Elementary School. Both the 2000–2005 and the 2005–2010 OUSD Facilities Master Plans include the construction of an expanded La Escuelita campus as a top priority. In 2003, the school district allocated $22 million for the school’s construction. Although the construction of a new and expanded La Escelita campus is current OUSD policy, this money remains unexpended.

Under the proposed sale, the school district is responsible for relocating these schools within the Eastlake neighborhood — meaning we will have to buy land (even though the taxpayers already own 8.25 acres within the neighborhood) at current market prices in an area where property large enough to accommodate a school campus is simply not available without the use of eminent domain.

As part of a larger new school construction initiative to relieve severe overcrowding in Central East Oakland, Dewey Academy High School was relocated in 2002 from its sub-standard facility in the Fruitvale district to a newly constructed facility next to the school district headquarters on the corner of 2nd Avenue and East 12th Street. The new facility cost $7 million and was paid for by our local school construction bond measure.

Under the proposed sale, the new Dewey facility would be demolished or moved to a yet to be determined location.

Lincoln, Franklin and Garfield, the schools that serve the surrounding Chinatown, Eastlake, and San Antonio neighborhoods have in the past been severely overcrowded. Declining student enrollment over the past five years has enabled these schools to move off of disruptive “year-round/multi-track” school calendars allowing them to stabilize their enrollment and function at their intended capacity.

All three of these schools, as well as La Escuelita, will be directly impacted by projected student enrollment increases resulting from the on-going construction of more than 3,500 housing units in the Chinatown, Eastlake, and the Oak-to-Ninth waterfront neighborhoods.

The proposed sale fails to present a prudent strategy that addresses long-term school and classroom facility needs faced by neighborhoods with an increasing housing stock.

Does the school district need the money from the property sale to pay off its state loan?

As you know, the school district has been in state receivership since 2003 when gross overspending prompted the State of California to issue a $100 million line-of-credit. In June 2003, the school district drew down $65 million from the line of credit, which has a 1.7 percent interest rate, and the District has since made four annual payments of $4 million. In accordance with its county and state-approved Multi-Year Fiscal Recovery Plan, the school district is expected, and is equipped to, fulfill its annual loan service payments.

Who really wants to sell this property?

In response to on-going parent requests to commence the construction of the new La Escuelita campus, the Oakland Unified School District issued a “Request For Qualifications & Development Proposals” on February 28, 2005 to solicit proposals that would achieve the following District objectives:

  1. Provide on-going/long-term revenue to the OUSD.
  2. Construct a new instructional campus of small schools serving a minimum of 890 students from pre-school through the twelfth grade.
  3. Establish architectural and land-use designs that provide positive economic and social benefits to the surrounding Eastlake neighborhood and commercial district.
  4. Provide new administrative office space for the OUSD.
  5. Improve the neighborhood.

The Board of Education (as well as former State Administrator Dr. Randolph Ward) has been clear about its policy objectives since 2003:

  • construct a new state-of-art Pre-K to 12th Grade Education Center, that includes and integrates district administrative offices, to serve existing and future generations of students; and
  • identify sensible and feasible opportunities that can provide on-going revenues to support the school district’s educational mission.

As for myself, I have never envisioned selling this property for the purpose of paying off the school district’s state loan as this land is absolutely needed to house schools, now and well into the future.

Far too often, elected officials resort to solving complex community problems using short-sighted get-rich-quick schemes.

I invite everyone to come to the third and final Board of Education public hearing regarding the proposed property sale. This hearing will be held:

Wednesday, September 6th
Board Room—1025 Second Avenue

Please come and voice your opinion!