Tuesday, February 20, 2024

Experts: Eureka City Schools Violated Open Meeting Law with Jacobs Property Swap

Posted By on Tue, Feb 20, 2024 at 1:53 PM

Eureka City Schools' main office. - FILE
  • File
  • Eureka City Schools' main office.
When the Eureka City Schools Board of Trustees convened the Dec. 14 meeting at which it would vote unanimously to enter into a secretive property exchange in hopes of unloading its former Jacobs Middle School campus, it violated state open meeting laws, according to two experts interviewed by the Journal.

Immediately following the board’s vote to forego the California Highway Patrol’s $4 million offer for the Allard Avenue property and instead enter into an agreement to give the property to a mystery LLC in exchange for $5.35 million in cash and a small residential property on I Street, much of the discussion focused on whether the district violated the Ralph M. Brown Act by failing to publicly release a draft resolution authorizing the agreement in advance of the meeting. A subsequent Eureka City Schools press release insisting the district had adhered to the act and is “committed to transparency” similarly focused on whether the district was justified in withholding the resolution until after its closed session meeting.

But experts recently interviewed by the Journal say the district failed to meet a basic provision of the act when it put together the public agenda for the meeting by neglecting to specify the properties that would be under negotiation.

Originally passed in 1953 and authored by its namesake Assemblymember Ralph M. Brown, the Brown Act is aimed to guarantee the public’s right to attend and participate in meetings of local school boards, city councils, boards of supervisors and other legislative bodies. It generally requires that public agencies conduct their business in public, giving residents an opportunity to weigh in on the issues under consideration. It does offer limited carve outs that allow agencies to discuss certain things privately in closed session. For example, things that could violate an employees’ privacy — like performance reviews or discipline — or things that could jeopardize an agency’s bargaining position — like contract or property negotiations — can be discussed privately. But there are strict limits on both how closed session items are noticed and the scope of discussion allowable behind closed doors.

In the case of Eureka City Schools, the closed session agenda item for the Dec. 14 meeting read: “Conference with Real Property Negotiator Superintendent [Fred] Van Vleck Regarding Jacobs Building Property Concerning Price and/or Terms of Payment (GC §54956.8) (Negotiating Parties: California Highway Patrol and AMG Communities-Jacobs, LLC).”

David Snyder, executive director of the First Amendment Coalition, said ECS meets some of the notification requirements, specifically naming its negotiator (Van Vleck), and the parties with which he is in negotiations (CHP and the LLC). But there’s a strong argument, Snyder said, that “Jacobs Building Property” is insufficient, as there’s an official opinion from the Office of the Attorney General clarifying that a property must be identified by address or parcel number. But the larger issue, he said, is the absence of the I Street property from the agenda entirely.

After all, the district was not just in negotiations at this point to sell or dispose of the Jacobs property but also to acquire a new one in its place — the essence of the property exchange agreement itself, which allowed the district to sidestep state requirements for selling surplus public property.

“What we’ve got here is an acquisition of a property and a disposal of a property, so what the public is entitled to know about is both, so the addresses of both should be included,” Snyder said.

Zachary Colbeth, a partner in the Walnut Creek firm Cannata, O’Toole & Olson who specializes in public transparency law, among other things, agreed.

“It appears that there has been a violation of Government Code section 54956.8 (regarding real estate transactions) and section 54954.5 (regarding closed session item descriptions),” Colbeth wrote in an email to the Journal. “The language in the statutes states, respectively, ‘the real property or real properties which the negotiations may concern’ and the ‘real property under negotiation.’ That would presumably include all real property under negotiation (i.e., not just the ‘Jacobs Building Property’).”

Reached last week and asked specifically why the district believed it had met noticing requirements for the Dec. 14 meeting, ECS Superintendent Gary Storts, who took the position when Van Vleck retired days after the Dec. 14 meeting, said the district complied with the law but declined to offer further explanation.

“The district maintains that it complied with the Brown Act,” he wrote in an email to the Journal. “The agenda was prepared in consultation with legal counsel, and I’m not at liberty to disclose the attorney-client advice ECS received on the subject.”

Under state law, any “interested person” may challenge an agency’s compliance with the Brown Act, according to Colbeth. The first step is to send the agency a “cure or correct” demand, clearly describing the challenged action and the nature of the alleged violation within 90 days of the violation (in this case, by March 13). The agency then has 30 days to either cure and correct the challenged action — generally through a do-over, essentially repeating the agenda item with proper noticing — or inform the “interested person” in writing of its decision not to. In the event the agency refuses to cure the alleged violation or does not respond, the “interested person” can take the matter to court, pursuing an injunction and/or judicial determination.

In this case, it’s unclear exactly what was decided in the closed session discussion, though it’s clear something was, as it triggered staff to subsequently bring forward the property exchange resolution to be discussed in open session and its ultimate approval. But the district reported no final action taken.

To comply with the Brown Act, the district could not have distributed the proposed resolution or underlying draft property exchange agreement to a majority of the board before it was made publicly available, which occurred immediately after the closed sessions discussion on Dec. 14. And the act limits the bounds of the closed session discussion on property negotiations to directing its property negotiator (Van Vleck) on price, terms of payment or both. In this case, it appears the district had a property exchange offer on the table from AMG Communities — Jacobs, LLC, and then presumably discussed in closed session whether that was preferable to the offer from CHP and whether to bring that forward in open session, though it’s unclear due to the secretive nature of closed session discussions and the lack of any action having been reported out. It’s worth noting, however, that this was the first meeting for which AMG Communities — Jacobs, LLC, appeared on the agenda, indicating it should have been the first time the board discussed the newly formed entity — and its new negotiating party.

The Jacobs deal has been shrouded in mystery since being approved by the board. An attorney representing the LLC — Brad Johnson, who has also represented Citizens for a Better Eureka and proponents of the Housing for All initiative, both of which have an interest in the Jacobs property while seeking to halt the city of Eureka's plans to convert downtown parking lots into housing developments — has declined to identify any of its principals. Storts has maintained that ECS has only communicated with attorneys representing the LLC. And the residential property involved in the exchange — a single-family home converted into a duplex at 3553 I St. — remains in escrow under a different sale to a buyer who has not been publicly identified.

The Jacobs exchange remains in a “feasibility” period for both parties to conduct various inspections and terminate the deal, if they so choose, which was extended to Feb. 26 in order to “obtain necessary approvals.” The Eureka City Schools board, meanwhile, discussed the agreement in closed session on Feb. 15 but reported taking no action. This time, however, the agenda listed both properties under negotiation.
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Thadeus Greenson

Thadeus Greenson is the news editor of the North Coast Journal.

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