School district sells 24.7 acres to Home Depot for $30 million — San Diego (CA) Union-Tribune, 11/9/04

By Helen Gao

Three years after using eminent domain to take possession of a 24.7-acre parcel in Kearny Mesa, the San Diego Unified School District is selling the vacant land to Home Depot for $11.2 million more than it paid.

The school board was scheduled today to authorize the district to begin escrow on the $30 million sale. District officials said the site is unsuitable for a school and there is no other school district use for it.

The district bought the parcel in 2001 to build a central food processing and distribution facility with plans to also consolidate other operations. A year later, the project was scrapped. Instead of a central food center, the district decided to improve existing facilities.

The parcel on Copley Drive is south of state Route 52 and east of Interstate 805 in a business/light industrial park.

The money from the sale will go into a capital improvement account. District facilities chief Bob Kiesling said the money would most likely be spent on conversion of large high schools into clusters of career-themed academies or other, smaller projects.

Kiesling said Home Depot was the only bidder for the parcel because district trustees set the minimum bid at $30 million, $6 million more than staff members suggested.

"We knew the price was fairly high. We were comfortable we were going to get some bids," Kiesling said.

The previous owner of the site was San Diego-based West RNLN, LLC. When the district initiated the eminent domain proceeding against the company, the court approved a negotiated settlement of $18.8 million for the land.

Under the U.S. Constitution, public entities can condemn private property for public use as long as they pay the owners the fair market value. Typically, eminent domain is used to acquire land for freeways, parks, schools, redevelopment projects and other public purposes.

Herbert Lazerow, professor of law at the University of San Diego, said it's not unusual for public agencies to not follow through with a project after using eminent domain to acquire land. Lazerow also said there is nothing wrong with a public agency making a profit from the sale of land it condemned, as long as the condemnation was not done to make a profit.

The profit, he said, is "probably the result of the fact the government has owned the land for two to three years and has been the beneficiary of this extraordinary run-up in real estate prices."

According to property records, West RNLN paid $13 million for the parcel when it bought the land in 1999 from The Copley Press Inc., the parent company of The San Diego Union-Tribune.

David Dorne, a member of the law firm Seltzer Caplan McMahon Vitek who was listed as an attorney representing West RNLN, had little to say about the district's transaction or its condemnation of his client's land.

"We don't have a reaction," he said. "It was a legal matter. We don't have much to add or take away from it."

The district uses a portion of the site for storage of portable classrooms and buildings.

As part of the purchase agreement, it will lease back up to 7 acres from Home Depot for a maximum of $19,800 a month until Aug. 31, 2005, so it can continue to use the land for storage.

San Diego Union-Tribune: www.signonsandiego.com