School Board Finalizes Plan to Purchase $1.5M Home

The decision was approved as both an investment for the district and a means to house the superintendent.

The Beverly Hills Unified School District Board of Education voted 5-0 at its regular meeting Tuesday evening to proceed with its purchase of a $1.54 million home on North Doheny Drive with the hope of leasing it to Superintendent Gary Woods and his family.

"For me the investment is first and the superintendent is second," board President Brian Goldberg told Patch. "For others [on the board] it is superintendent first and an investment second."

The resolution before the board to buy the residential property at 220 N. Doheny Drive was initially put forth as a "real property" investment, but board member Noah Margo requested Tuesday that a clause be added to the resolution to state that an additional reason for the purchase was to house the district superintendent.

Board members indicated during the meeting that the clause was added in an effort to stabilize the superintendent post, which has changed numerous times over the past decade. Woods has not been involved in any of the discussions regarding the property.

The two-level, 2,665-square-foot home has four bedrooms, five bathrooms and sits on a 5750-square-foot lot. It will be 100 percent financed through a zero-down municipal loan at a fixed interest rate of 3.7 percent over 15 years, Goldberg said.

According to legal counsel attained by the district from Best, Best & Krieger (BB&K), investing in residential real estate, as well as acquiring housing for the superintendent, are both legal for the school district to do.

"My hope is the superintendent will rent the home from us, but if not this is an investment for the district," Goldberg . "We will be able to use it to offset some of our obligations for our required reserve." 

As a  district, the BHUSD needs to maintain  of at least 3 percent of its overall budget. Once the North Doheny Drive property is paid off, it can be used as leverage for that reserve amount, freeing up about 3 percent of the district's working capital in the general budget, Goldberg said.

When Patch that the school board had voted at its June 12 regular meeting to move forward with the home purchase, the decision drew criticism from residents who alleged that negotiations surrounding the investment had not been conducted with enough transparency. 

On May 23, BHUSD Chief Administrative Officer Dawnalyn Murakawa-Leopard signed a residential purchase agreement for the North Doheny Drive property, six days before the board first discussed the investment publicly at its May 29 regular meeting. The district put down a deposit of $46,050, which it would have lost if the board voted against going through with the purchase. (To view the purchase agreement, click here.)

Members of the board acknowledged Tuesday that the general concept to invest in residential real estate was first discussed during a February closed session, but that the idea was put on hold while the board dealt with its over the Metropolitan Transportation Authority's plan to build a subway tunnel under Beverly Hills High School. 

"When they first determined that they wanted to acquire a piece of residential property, they should have put it on the agenda and discussed the reason and the philosophy behind what they wanted to achieve. That way the community would have been put on notice that that was their intent," District Finance Committee Chair Herb Young told Patch. The committee is tasked with advising the board regarding the district's financial interests. "Because of the process they used, it came as a surprise to people." 

Former school board President Myra Lurie that she was "shocked and dismayed at the secrecy surrounding this action."

"California law requires the district to post specific information in order to notify the public about any property that is the subject of closed board negotiations," Lurie wrote. "These requirements are spelled out in very specific detail in a portion of the government code known as the Brown Act." 

The Brown Act is a law meant to "facilitate public participation in local government decisions and to curb misuse of the democratic process by secret legislation by public bodies." The act pertains to California city and county government agencies, boards and councils. 

Representatives from BB&K have advised the board that the Brown Act does allow school districts to discuss in closed session the acquirement of real estate to ensure that costs aren't inflated based on the involvement of a public entity.

"It is absolutely clear to me...upon our counsel's recommendation, that we were under no obligation to bring that kind of dialogue to a public forum in the event that it would be to the detriment of our bargaining position with whomever we might be negotiating with," board member Jake Manaster said during the regular meeting. "That being said, I certainly don't believe, nor did I experience, any sort of subterfuge or a goal of not sharing with the community for purposes that were inappropriate."

The board was also criticized for not involving the District Finance Committee with negotiations for the home purchase until it had already gone into escrow. Goldberg said the reason for not consulting the committee was because the purchase will cost BHUSD $133,225.56 annually for the next 15 years, an amount that "represents .0024 percent of expenditures of a $53 million annual [district] budget for 2013."

The board did meet with the committee Tuesday afternoon in a study session to discuss the investment before making its final decision on the purchase later that evening.

"The reaction to this idea totally caught me off guard," board member Lewis Hall said at the regular meeting. "There was no intention from me to hide anything and I have not witnessed or seen anything from my colleagues to hide any of this."

Hall said he supported purchasing the home because it was priced below market value and the district did not have to make a down payment, does not have to pay property taxes and is locked into a fixed, low-rate interest fee. He also added that it was an opportunity to keep Woods in the district for the long run.

As discussion on the home purchase ended at the regular meeting, Goldberg said the board "could have and should have done a better job in communicating this idea and our plans."

"I too will pledge to do a better job in thinking about how things are perceived in the community and ensure that we error on the side of more transparency, not less, as long as that does not inhibit our ability to negotiate and do the best possible job for the district," he said.

What do you think of the school district's purchase of 220 N. Doheny Drive? Tell us in the comments section below.

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Tom Culp June 28, 2012 at 10:45 PM
Im sorry but the responsibility is the same weather they get paid or not. With Goldberg's mantra of transparency it seems odd that they wouldn't KNOW how the community would feel about this well in advance of their decision. The entire Board should also know Brown Act and their limitations. They also just went through HUGE battles involving conflict of interest or even the appearance of conflict of interest but yet they put themselves in a position where they use a Realtor that has in essence bought his contract through donations to the BHUSD and individual Board members? Like a spoiled child who wants what they want regardless of the consequences.....the Board, at Goldberg's insistence, decided to ramrod this through and take the heat after rather than listen to the public and have not get their (his) own way. Richard please don't try to play it off as if they snuck out at night and got caught by Mommy. The reason I'm on edge it because I feel weve been played.
Richard Anderson June 29, 2012 at 04:51 AM
I'm going to go out on a limb, and guess that you were at the meeting on Tuesday night. It is great that we all get to say what's on our minds in America. It's sad however that most of us just go through our daily lives and don't say much. It's also true that a select few do use their right and express themselves. It's unfortunate that those same select few usually have only negative things to say. I'm just curious, did you ever serve on the Board. I'm going to guess yes. Am I right? I'm sure I will ever know. Concerning the choice of a Realtor, I don't know why they chose whom they did. I will say that in my many years on this earth, I have bought and sold many places that I lived. I was so glad that I had someone I knew well most of the time. I hear horror stories from friends that didn't know their agent very well, and missed many issues with the home they bought that later cost them dearly. It's just good business to do business with someone you know and trust will look out for your best interest when you are looking to buy a piece of property. I believe the Board members are very bright people, or they wouldn't have gotten where they are in life. I don't believe they would knowingly bring on a firestorm like this if they knew it was coming. Sorry, but that is just my opinion. The wonderful thing about being an American, is that we can agree to disagree.
Tom Culp June 29, 2012 at 04:43 PM
@Richard, I was not at the meeting because I felt threatened by Mr. Goldberg as I had stated in the previous article. No I was never on the board or even worked for the school district or the city. I will agree with you that It's just good business to do business with someone you know and trust who will look out for your best interest when you are looking to buy a piece of property. However when it comes to public funds and millions of dollars of it, laws are put in place to try and prevent palms from being greased. I also agree Board members are very bright people but they are not immune to abusing their position. That’s why forums like this exist so we can have a part in where our tax dollars are going. Instead of being strong armed at a board meeting. I strongly feel something’s wrong with this deal and others and the fact the Mr. Goldberg claims he has answered everyone’s questions when he clearly has not. This makes me dig deeper, but as I do I find I don’t have to dig much before it floats to the surface.
Tom Culp June 29, 2012 at 05:38 PM
Now that Goldberg got what he wanted I guess he dosn't find the need to defend his actions on this forum. Or the attorneys told him to keep his mouth shut.
Tom Culp June 29, 2012 at 06:45 PM
@Richard you said “I remember that one of the board members stated that their hasn't been a Superintendent since sometime in the 1970's that has had their children in the Beverly Hills Schools.” Also the Beverly Hills weekly said “BHUSD has gone through 11 superintendents in 12 years” 5 minutes research uncovers that BS. Don’t believe everything you read it the papers or at a board meeting. Robert Pellicone 2000, no kids Gwen gross 2000-2003 I believe her kids were grown Dr. Jeffrey Hubbard 2003-2006 had kids enrolled in the school district. John Fitzpatrick 2006 temp Kari McVeigh 2006-2008, no kids Dr. Jerry Gross, 2008-2011 Kids grown, no kids Dick Douglas 2011-temp Dr. Gary W. Woods 2011-2012


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