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Complaint filed over land swap
By ALDRICH TAN/Democrat Correspondent

November 21, 2005

The losing bidder in a complex land deal filed a complaint with the California Fair Political and Practices Commission hoping to overturn the Davis Joint Unified School District's decision to exchange property with another developer.

The Arkad Management Group, a Newport Beach-based land developer, filed an FPPC complaint alleging that school board members Marty West and Keltie Jones had a conflict of interest over the school board's Oct. 13 resolution to exchange a district-owned property with Oakland-based developer BP Equities, Inc.

According to the Arkad partner David Westin's complaint, West lives on the same street as the vacant property and Jones lives southeast of the site. Both would benefit from the raised neighborhood property values through the site's development.

School district superintendent David Murphy said there is no conflict of interest regarding Arkad's claim against West and Jones.

"Jones and West] live further away from the property than the legal limit that would have prevented them from participating in the board's decision," he said.

The complaint is the latest development in the complex entanglement over 8.4 acres of district-owned property located on the south side of Grande Avenue between Catalina Drive and F Street in Davis. The school board will be holding a special meeting Tuesday evening to discuss issues concerning the property exchange.

In May, the school district had requested bids for Grande property, district superintendent David Murphy said. The district received eight bids, including Arkad and B.P. Equities.

Arkad partner David Westin said he submitted a bid of $6.06 million and proposed property located on County Road 29 and County Road 102, north of the Grande site. B.P. Equities offered $4.5 million and agreed to acquire 10 acres of land currently owned by the University of California to exchange for the Grande site.

The district's decision to not take Arkad's bid for Grande Property could lead to a loss of millions of dollars in potential school district funding, said Robert Milbrodt, a local real property assessor.

"I'm especially concerned because I have four kids in the school district," Milbrodt said. "The school district is going to lose money from this property exchange."

Murphy said he found Arkad's offer "speculative." The organization offered a $1.56 million income stream through deed restrictions on homes resold by the Grande site, Westin said. The district would receive 1 percent of the profit from resells.

"The school is not interested in assumptions about property income," Murphy said. "We are interested in a cash proposal."

Other issues can arise with the proposed income stream, said David Young, a real estate lawyer in Woodland.

"The district would have to take a lot of extra time and effort to monitor and implement the collection of payments," he said.

The school district was also not interested in Arkad's specific property, Murphy said. The district initially told bidders that they did not need to initially provide land to trade property. It would work with the chosen bidder on several potential properties.

"If we required that somebody had a property at hand then we would be restricting our market," he said. "We would have significantly restricted the number of people interested in responding."

BP's proposed property exchange is ten acres located at the northwest corner of Russell Boulevard and County Road 96, according to the property exchange agreement. It is the site of the rural Fairfield Elementary School and land currently owned by the University of California, Davis.

The school district is strongly interested in acquiring the Fairfield school site, Murphy said. The property exchange agreement includes a 180-day investigation period to see if an exchange between BP Equities and the UC Davis is feasible, according to the terms of the agreement.

John Meyer, vice chancellor for resource management and planning at UC Davis, told the Davis Enterprise on Oct. 16 that the transfer of the Fairfield property to a third party would be difficult to accomplish.

On Tuesday evening, the school district will consider whether or not to rescind the property exchange resolution. Murphy and Brian Purcell, president of B.P. Equities, said they remain optimistic that the exchange will eventually go through.

"I have been meeting often with the neighborhood association [of the Grande Property site]," Purcell said. "I feel very fortunate that my company has been chosen for this deal. I intend to do a good job and bring a nice housing project to Davis."