Eureka Schools Agrees to Strange Property Swap 

A mystery developer has swooped in to acquire Eureka City School's long fallow Jacobs Middle School property, scuttling the California Highway Patrol's plans for the site.

Depending on the developer's plans, the surprise move could also have reverberating impacts on an effort to get Eureka voters to block the city's plans to convert a number of parking lots in downtown and Old Town into apartment buildings.

The unusual deal — which will see the district trade 8.5 acres of the site on Allard Avenue for a small, residential property on I Street and $5.35 million — was unanimously approved by the district's board of trustees last week but remains largely shrouded in mystery, with questions remaining about who this developer is and what their plans are for the former school site.

The developer is identified in the property exchange agreement only as AMG Communities — Jacobs, LLC, which filed articles of organization with the California Secretary of State's Office just two days before the board meeting. Those articles list Thomas M. Swett, an Amador County attorney with the firm Burton and Swett, as the LLC's agent. Swett did not return Journal messages seeking comment for this story.

Outgoing district Superintendent Fred Van Vleck, who is slated to leave his post next month, incoming Superintendent Gary Storts and Assistant Superintendent Paul Ziegler all declined to comment for this story, with Executive Assistant Micalyn Harris responding to a Journal inquiry emailed to all three indicating the district will not comment further until the Jacobs property is officially in escrow, at which point "the board will issue a statement."

When the district released the agenda for its Dec. 14 meeting, folks who have been tracking the fate of the Jacobs site quickly noticed two agenda items. First, the board was slated to meet in closed session with Van Vleck, its real property negotiator, to discuss "price and/or terms of payment" for the Jacobs property, identifying the negotiating parties as the CHP and AMG Communities — Jacobs, LLC. Prior to this, the board had met with its negotiator in closed session to discuss "price and/or terms of payment" for the Jacobs property seven times in 2023 and all listed CHP as the only other party involved, so the inclusion of the LLC drew immediate attention. Then, on the board's open session agenda, there was an item asking the board to adopt a resolution approving a property exchange involving the Allard Avenue site in a deal valued at $6 million. But the district did not release the draft resolution or the "exchange agreement" it authorized. The Lost Coast Outpost reported that it reach ed out to Harris about the omission and she said the open-session agenda item was contingent on the closed session discussion.

"Depending on the board's determination out of those confidential discussions, they may or may not decide to take action," she said. "And if they do decide to have a conversation outside of closed session and take action on that item, those documents will be available for the public."

When the board reconvened out of closed session, it reported no actions taken but the draft resolution and exchange agreement were then distributed to the board and made available to members of the public in attendance. The documents specified that district staff was proposing it trade the 8.5 acres of the Jacobs site for a 0.125-acre property at 3553 I St. that includes two small housing units the district valued at $650,000 and a cash payment of $5.35 million. According to the Outpost's reporting, Van Vleck informed the board the cash payment alone was $1.35 million beyond the CHP's highest offer, and the board voted unanimously to move forward with the exchange.

The strange turn — which seemed to blindside even some of those involved in the negotiations and transactions — raised a host of questions, including whether the board's action violated state open meeting laws.

First Amendment Coalition Executive Director David Snyder said it is lawful for a governing body to withhold a draft resolution from the public under certain circumstances provided it is made available to the public at the same time it is distributed to all or a majority of the board. So as long as a majority of the board didn't get a look at the draft resolution and property exchange agreement before the documents were handed out in open session, that's likely legal, Snyder said.

But he said the law limits closed session discussions on property negotiations to price and terms of payment, with anything beyond that having to be discussed in open session. In this case, Snyder said it's "odd" that the open session agenda item would be contingent on the closed session discussion, particularly as no action — like the board voting to accept an offer from the developer or agreeing to the general terms laid out in the exchange agreement — was reported out.

"That raises the question of whether they stayed within the bounds of closed session for real estate transactions," Snyder said. "What were they talking about in closed session? If they were talking about things beyond price and terms of payment, it should have been done in public."

But even assuming the board did not violate the Brown Act, Snyder said best practices from an open government standpoint would have simply been to agendize the closed session item for one meeting and then bring the ensuing draft resolution and exchange agreement forward at a future meeting, giving the public time to review the documents in advance.

"Why do it that other way other than to keep the public from seeing it?" Snyder said. "What is the reason for doing this in this strange, expedited fashion other than to tamp down public discussion and participation?"

News that the district was entertaining another offer for the Jacobs site came as a surprise to the California Highway Patrol, which has long been hoping to build its northern Humboldt headquarters on the property, with plans having advanced to the point the agency held a public meeting in July to gather community input.

"We're disappointed and were also surprised by this resolution," CHP spokesperson Paul Craft said in a statement released in response to a Journal inquiry. "We believe our purchase and construction on the property would have been beneficial to the surrounding neighborhood, and our operations. That said, the school board must consider its operations and the education of Eureka's children. We trust the sale of the property meets those goals for them and take solace in that fact. We also hope the purchaser will be considerate of their new neighbors and want to express our gratitude for the outpouring of support we received from the community."

News of the exchange also came as a surprise to Charlie Winship, a local real estate agent who technically still owns the property at 3553 I St. that the district is receiving as a part of the swap. Winship told the Journal he was approached by fellow real estate agent Scott Pesch about six months ago, with Pesch asking if he was interested in selling the property — which includes two residential units and a detached garage — to an "investor looking to acquire several" multi-unit properties in Eureka. Winship said he responded that he was not interested in selling unless he received an offer above market value.

"He approached me again in November and presented an offer from a private party," Winship said, adding that he ultimately agreed on an offer.

Winship said the sale — currently still in escrow — had no "correlation or ties with the Jacobs site."

"My private sale's correlation to the Jacobs site has been a surprise to me as well," Winship said.

Both Winship and Pesch declined to disclose the terms of the sale or the identity of the buyer. Asked about the buyer's plans for the Jacobs site, Pesch said he is only involved in the transaction to purchase the I Street property.

While it's not yet known what Pesch's client agreed to pay Winship for the I Street property, it appears the value placed on it by Eureka City Schools far exceeds what would typically be the market rate. While its assessed value is $271,327 and the real estate website Zillow estimates it to be worth $370,900, the exchange agreement values it at $650,000.

Because the former Jacobs school site is a central component of an initiative that has qualified for the November ballot seeking to block city plans to convert parking lots into housing projects, people immediately began speculating that the property exchange was the work of the initiative's proponents, most notably Security National founder Robin Arkley. If passed, the initiative would require any conversion of the downtown and Old Town result in a net addition of parking, while also rezoning the Jacobs site for multi-family development. The initiative has been called deceptive by opponents who noted rezoning the Jacobs property would do little to promote housing construction as it was still under the control of Eureka City Schools.

Reached Friday, Gail Rymer, spokesperson for the so-called Housing for All initiative, said its proponents are not involved in the land exchange deal.

"No one from Security National, the Housing for All initiative or Citizens for a Better Eureka have any involvement in the Jacobs property swap," Rymer wrote in an email to the Journal. "On behalf of the Housing for All initiative, we are pleased to hear the news. We hope this has the potential of supporting badly needed housing in Eureka."

Eureka City Manager Miles Slattery also hopes the property exchange will lead to the construction of more housing, though he said he does not see it having any impact on the city's plans to turn parking lots into housing. Regardless of what other housing projects may come to fruition, Slattery said the city's Housing Element obligates it to follow through with its plans for the Old Town and downtown lots.

But Slattery said news that the Jacobs property, which the city had been looking to purchase until Eureka City Schools drew a hard line in negotiations, saying the district would not accept anything less than $4 million, far more than Slattery said it appraised for, changes things. Now that it looks like the property will no longer be owned by the district, Slattery said the city will look to rezone it.

"The city will be going through a public process to rezone Jacobs," he said, adding that staff is planning a town hall-style meeting to gather input from neighbors in January, which will be followed by "an extensive public process" to get it rezoned "ASAP."

Thadeus Greenson (he/him) is the Journal's news editor. Reach him at (707) 442-1400, extension 321, or [email protected].