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School District Moves Slowly to Manage Its Real Estate

The San Francisco Unified School District's offices on Franklin Street
The San Francisco Unified School District's offices on Franklin Street
Properties that would generate more than $100 million if sold have sat idle for years

Despite being one of the largest financially struggling landowners in the city, the San Francisco Unified School District has largely failed to actively manage its holdings, leaving a number of valuable properties idle for years.

Decades of declining enrollment led the district to acknowledge in 2007 that roughly 20 percent of its holdings had little or no educational use. It also designated 10 vacant or underused properties as surplus and concluded that selling them would net an estimated $134 million, plus millions more in property tax revenue.

But interviews and records show that the district has moved slowly since then to sell or lease the properties. None of them have been sold. Last year, the district cut its real estate department director, who had been in charge of overseeing the sale and leasing of the district’s real estate, and shifted his duties to the district’s facilities director. A real estate consultant has been hired to help sell and develop these properties.

Critics say the district’s lackadaisical approach is baffling, given that it is facing $113 million in cuts through June 2012. Taxpayers have financed $745 million for two bond measures to pay for improvements to district facilities, and the city has spent millions of tax dollars to help underwrite art and other extracurricular activities for students since 2004.

“They have significant assets that they should absolutely be making better use of to provide a better education in a time of great need,” said Abraham Simmons, whose three children attended elementary schools in the city and who recently lost to Mark Farrell in the race to replace Michela Alioto-Pier on the Board of Supervisors. “The district is sitting on hundreds of millions of dollars of property and officials have been unable to come to agreement for years.”

The district’s surplus properties include what was once the Florence Martin Children’s Center, a low-slung building covered with graffiti in the city’s Haight-Ashbury neighborhood, and a sprawling patch of crumbling concrete and overgrown weeds near Highway 280 in Potrero Hill. Notable exceptions like the former Newcomer High School in Pacific Heights have attracted some tenants — a Montessori school and a nonprofit organization — that are generating modest revenue for the district.

Though it may seem like a waste to maintain empty buildings and miss out on potential sales and property tax revenue, some district officials argue that the empty properties could be converted into affordable housing for teachers or new charter schools. At least half of the surplus properties remain unused, according to the district.

“Some of these properties have potential value to us in the future,” said Jill Wynns, a longtime member of the school board. “We want to be careful.”

But Wynns said the plan for teacher housing remained stalled, and the staff is busy with other pressing policy issues, like budget cuts.

Predicting the district’s future enrollment, let alone the number of new charter schools that will open, is impossible, educators say.

“It is like predicting the California economy,” said Michael Kirst, an emeritus professor of education and business administration at Stanford University. “Our population growth has slowed, but how do you know it won’t resume?”

This article also appears in the Bay Area edition of The New York Times.

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