Like many public land sales that come before the Oakland City Council, the Derby Street parcel sale was set to glide beneath public notice when it began its final journey of council approval in May, 2018–a perfunctory committee nod and a quick set of ayes at an unnoticed city council meeting seemed assured. But there was something atypical about the Derby street sale that caught the attention of both local education and affordable housing activists.
Even at a glance there were several red flags. First, the city–which bought the Derby parcel with Redevelopment Agency dollars over ten years ago–would sell Derby to Idaho-based Pacific West [now simply The Pacific Companies] to build a new campus for an existing charter school called Eres, owned by the giant charter school company Aspire. Second, the city’s policies earmark redevelopment agency land for affordable housing; but although Pacific’s initial pitch for Aspire/Eres in 2015 was for a housing/charter development, Pacific dropped the housing idea early on and would build only the Aspire/Eres campus. Third, Aspire/Eres, the charter school and charter company, seemed to be working in opposition to the Oakland School district, which initially publicly stated that it did not support the campus development. Lastly, Aspire/Eres also planned to greatly expand enrollment, but there is already a glut of schools in the area, including another charter school company mere blocks away. Lastly, the traffic and parking burden along an already clogged corridor seemed untenable and neither the company nor the city had a plan for it.
More than anything at the time, the city’s backdoor promotion of a charter school at a time when OUSD is reconsidering its support of charters, fueled the opposition. Dozens of angry speakers–most of them parents, teachers and students–flooded the city council chambers on May 15, the night of the scheduled Derby parcel sale vote. The strong community opposition dwarfed the contingent of pro-Eres speakers who had made the site approval seem like a moral duty a week earlier at the mid-day Community and Economic Development Committee meeting that unanimously passed the sale on for city council approval. Rather than risk the notoriously weak-knees of the council when it’s confronted by public opposition, Abel Guillen–a veteran of land sales in the council’s shadows–pulled Derby from the agenda and set no future hearing date.
Though opponents celebrated a victory, it was clear the city had no intention of backing away from the sale. Rather, the city continued to meet with Pacific in closed session, free from public scrutiny and community pressure. After the furor had died, and activists moved on to the many other horrendous city policies on affordable housing and education, the sale resurfaced on the Community and Economic Development Committee docket, and was unanimously passed once more. It’s now scheduled for full council vote on July 10th.
Certainly, the same network of education and housing activists and community groups is likely to appear at the July 10 meeting with the same arguments against the sale. But beneath all the extremely legitimate reasons to oppose Derby already enumerated by the community, there lurk other issues that are also concerning. Foremost among them is Aspire Charter Schools symbiotic relationship with the for-profit Pacific Companies and its potential repercussions in potential additional land deals and charter expansion in Oakland.
Unlike, Aspire, Pacific Companies is a for profit company that specializes in affordable housing development, and more recently, charter school development. Though based in Idaho, Pacific is a behemoth affordable housing developer and umbrella company that has cultivated an intimate relationship with State of California Treasurer, John Chiang.
Last year, the Sacramento Bee reported that Pacific’s CEO, Caleb Roope, donated tens of thousands of dollars to Chiang over several years, while Pacific received a 100 million dollars worth of state tax breaks and 60 million in federal tax breaks. The Bee found that Chiang had voted to approve the vast majority of Pacific’s applications for tax credits over a ten year period, and helped the company appeal when their applications were rejected. Pacific is a construction company and architect, which positions Pacific to reap 100% of the funding in its projects.
Though Aspire and Pacific are separate entities they have become increasingly entangled in recent years. In 2016, Aspire’s former CEO, James Wilcox and Pacific’s CEO, Roope, formed the development company Strategic Growth Partners as a Pacific owned company specifically dedicated to charter school lobbying, development, design and construction.
Wilcox’s current position as the CEO of Pacific’s SGP is no accident. In fact, Aspire’s strategy of relocating and expanding existing charters on privately owned land in built-to-suit facilities began under Wilcox’s direction when he still ran the company. In 2010, Wilcox negotiated a deal with the Sequoia Union School District for a four million dollar grant and permission to move East Palo Alto Phoenix Academy onto a privately purchased and developed built-to-suit facility. At the time a Sequoia school board member remarked that the charter’s demand for its own land and building via Proposition 39–which obligates school districts to supply facilities for charter schools–seemed unprecedented.
Shortly after Wilcox and Roope founded SGP, Pacific/SGP proposed three housing/charter hybrids–two of them located in Oakland’s Fruitvale, one in San Jose. Though the Aspire/Eres re-location and expansion was apparently one of these proposals and still appears to be vaguely described on its website, the company eventually dropped the housing idea in its pitch to the City of Oakland.
According to its website, Pacific/SGP may be planning more as yet unidentified Aspire/housing projects in Oakland. These plans are also alluded to in Aspire’s latest financial statement, which describes Pacific/SGP’s plans to buy land and develop it for two additional Oakland Aspire schools currently operating in OUSD facilities, the Aspire College Academy and Aspire Triumph Academy.
Though the specifics of the deal between Pacific and Aspire for the Derby street parcel aren’t currently available, Aspire’s Triumph and College plans described in the financial statement gives some hint at the dynamic between the two companies. The statement describes an agreement to loan 6 million dollars to Pacific/SGP at 0% interest to purchase land and construct a campus for the two Oakland charter school in expansions very similar to the original Aspire/Eres plan. Aspire would then lease the sites from Pacific/SGP, apparently in perpetuity, which seems like an extremely beneficial plan for Pacific/SGP.
Building and owning these publicly funded charter/housing hybrids seems to be Pacific/SGP’s primary focus. Though Chris Grant, a Pacific representative, claimed at the May 15 council meeting that affordable housing in Oakland is one of the Pacific’s main areas of work, the company’s website shows no current affordable housing projects either existing or planned in Oakland.
Rather, Pacific’s extensive network of affordable housing in California seems mostly focused on far-flung exurbs and commuter bedroom communities–a strategy which may actually fuel displacement instead of alleviating it via affordability pull factors. Pacific’s only current plans for affordable housing in Oakland seem to be Charter School/Housing hybrids through SGP.
These concerns suggest that a public land policy that weighs such issues through a rubric of absolute public benefit is needed before such a sale becomes final. But rather than slow down and carefully evaluate Derby, the city council seems to be racing against time to approve the sale before any public lands policy is made official. Indeed, the city’s real estate agency–the Economic and Workforce Development Department–gave as its primary rationale for a public land sale that lacks community benefits the fact that there is no public lands policy.
The city council claims to be prioritizing the finalization of a public lands policy, though it’s not clear how close it is to devising one, nor how responsive the policy will be to community demands. At a June 26 public hearing on public lands, Economic and Workforce Development offered some lethargic policy proposals that for all intents and purposes ban local hire and affordable housing demands from public land sales.
At the same committee meeting, at-large council member Rebecca Kaplan presented a policy structure that incorporates the local hire and affordable housing community demands. Kaplan also presented a proposal for a moratorium on public land sales until such time as a policy is complete, but council members Annie Campbell Washington and Lynette Gibson McElhaney killed it with extreme prejudice.
Kaplan’s moratorium would not have included the Derby parcel, because the moratorium excluded parcels already linked to exclusive negotiation agreements with the City of Oakland, like Pacific’s with Derby. This was perhaps one of the reasons Gallo enthusiastically performed his second for the proposal, though he is the biggest supporter of the Derby sale on city council.
A public lands policy might mean trouble for the Derby sale to Pacific, regardless. Some of the odd blind spots in the process of selling land to a charter school outside of an OUSD led process might be re-opened to scrutiny in a public lands policy review. As one example, the planning commission opined that the Division of the State Architect, which monitors the construction of educational facilities, might not enforce the city’s building code on the project.
Obviously, a public lands policy might prompt a reconsideration of the land for a school, instead of affordable housing. And any policy that mandates local hire on projects carried out on purchased city land might be also be a problem for Pacific’s construction company. And all of these would be moot, of course, if the policy included a stricter preference to lease instead of sell land when possible. In any case, the city has not yet escaped the orbit of public scrutiny on the Derby sale and community groups may yet have something to say about it at the July 10 meeting.
Hyphenated-Republic 
Posted on July 1, 2018
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