Complaint Against CUSD regarding the Sale of Property in Laguna Niguel

Date: September 3, 2017

From: Dawn Urbanek

To: Orange County District Attorney, Special Prosecutor Ray Armstrong

Re: Concern that CUSD Deputy Superintendent, Business and Support Services Clark Hampton is selling a property in Laguna Niguel without full disclosure to Trustees and without following the proper legal process.

Request that the District Attorney review CUSD's actions to insure that there is no Fraudulent Land Sales, the Gifting of Public Assets, or the Wasting of Public Assets.

Supporting Documentation:

CUSDWatch: July 26, 2017 BOT Meeting Agenda Item #29

PUBLIC RECORDS REQUEST CITY OF LAGUNA NIGUEL

Background:

Allegation #1:

CUSD does not record board workshops. I attended the January 27, 2017 Asset Management Workshop where Staff presented Trustees with the possible disposition of three properties, including the one at issue in this complaint. The outcome of the workshop was a recommendation by Staff that they would renegotiate the lease and hold on to the property. There was no direction to "study options to sell the property".

Allegation #2:

At the February 22, 2017, BOT meeting, Agenda Item #9, page 250 the Board approved Resolution No 1617-50 on the Consent Calendar WITHOUT COMMENT.

"Laguna Niguel - Paseo de Colinas Property The District will reorganize the Laguna Niguel site adjacent to Niguel Hills Middle School to allow for the more efficient layout of storage. The District will negotiate the amendment of terms on the existing use agreement for storage space with the local car dealership. The District will also explore the option of potentially selling the site. District staff will involve City staff in the course of moving forward with plans for this site."

[Staff unilaterally added the language to "explore the option of selling the site"]

Allegation #3:

At the July 26, 2017 BOT meeting, Agenda Item #29 page 640, Trustees ratified a 2006 Declaration of Surplus Property authorizing the sale to PUBLIC ENTITIES.

When Clark presented this item to the Board he stated on the record that, "offers for this property had already been received".

"If this is approved Staff will move forward with an RFP to sell the Property outright".

Allegation #4:

When asked, Clark Hampton stated on the record that Staff was working with the City of Laguna Niguel on this property. In a response to a PUBLIC RECORDS REQUEST, the City of Laguna Niguel denied this allegation.

Allegation #5:

When asked if the lease had been renegotiated - Clark Hampton replied yes. The old rent was $38,000 per year. The new rent was $11,000 per month or $132,000 per year. The District has wasted public assets by failing to properly manage this lease. CUSD has probably lost several hundred thousand in lost rent due to mis-management of the public's assets.

Allegation #6:

Trustee McNicholas asked Clark Hampton if the Lessee knew CUSD was selling the property?

Clark Hampton responds - "If they don't... they will know soon".

[Laughter]

Allegation #7:

Trustees were warned that there may be a problem with selling the property "AS IS". The identified parcel appears to be part of two parcels owned by CUSD and may require a lot split in order for CUSD to keep Niguel Hills Middle School main parcel in tact.

Supporting Documentation:

At the July 26, 2017 CUSD BOT Meeting Trustees approved Agenda Item #29 Resolution No. 1718-02: RESOLUTION OF THE BOARD OF TRUSTEES OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT RECONFIRMING ACCEPTANCE OF THE ADVISORY COMMITTEE RECOMMENDATION; RATIFYING DECLARATION OF SURPLUS PROPERTY; AUTHORIZING OFFER OF DISTRICT PROPERTY FOR SALE TO PUBLIC ENTITIES; AND AUTHORIZING PUBLIC SALE OF PROPERTY (LAGUNA NIGUEL PROPERTY)

The Resolution at page 640

Board Audio at 170.10

Clark Hampton presented this item to the Board.

In the February 22, 2017 Resolution Board gave direction to Staff to renegotiate the Lease with Alan Cadillac AND to also explore selling the property outright. There have been offers received for the property recently.

Gave background- Property was declared surplus in 2006.

If this is approved Staff will move forward with an RFP to sell the Property outright.

[Clark already has a buyer]

Board Audio at 171.35 BLUE CARD- Dawn Urbanek

BLUE CARD- Dawn Urbanek

I attended the workshop where all of this was discussed.

At the January 27, 2017 Asset Management Workshop, District Staff recommended continuing the Use Agreement with the car dealership (Allen Cadillac of Laguna Niguel) and renegotiating terms. This would allow CUSD to retain Ownership of the site and provide CUSD with a revenue stream for deferred maintenance.

SUMMARY and NEXT STEPS: Renegotiate use agreement with local car dealership.

[It says nothing about exploring options to sell the property.]

February 22, 2017 BOT Meeting Agenda Item #9 Exhibit #9 page 250. RESOLUTION No 1617-50 Asset Management Plan

[Staff unilaterally added the language to "explore the option of selling the site"]

Clark states that Staff is "working with the City of Laguna Niguel".

I did a PUBLIC RECORDS REQUEST to the City of Laguna Niguel and asked if Staff was working with the City.

[The City said "NO"]

Selling the Parcel "AS IS" may be a problem because the property spans to parcels, and the one CUSD is keeping ownership of would need to be split.

My concern is that STAFF is making the unilateral decision to sell property and getting Trustee approval through mis-information.

I pointed out that this is the same type of action that resulted in the gifting of $13 million in taxpayer money to the Ranch in the purchase of the Esencia School Site which is the subject of a DA Investigation.

Neither Kristen Vital nor Clark Hampton are licensed brokers. The Esencia deal was signed by an Attorney with no name using an X to sign his name.

A complaint has been filed with the Ca Bureau of Real Estate on behalf of taxpayers.

Board Audio at 174:22

Moved by Amy Hanacek. Oh! There is discussion?

Note: No matter what a member of the Public says - there is no real thought or consideration given to their statements. Trustees rubber stamp whatever Staff recommends.

Board Audio at 174:27

Trustee Holloway asked who had to be noticed about the sale of the sale of this property.

Board Audio at 175:54

Unidentified Attorney for CUSD- deliniated who needed to be notified regarding the sale of surplus property. The Attorney outlined the process. "This gets you back to where you were in 2006".

Note: The Attorney outlined the Legal Process- but is it being followed?

Board Audio at 170:10 Clark had already stated:

"There have been offers received for the property recently."

and

The City of Laguna Niguel has now responded that CUSD had not been in contact with them regarding this process.

This is another matter for the District Attorney. Clark Hampton SHOULD NOT BE UNILATERALLY NEGOTIATING LAND DEALS.

Board Discussion:

Board Audio at 176:08

Trustee Jones seconds the Item.

Board Audio at 176:17

Trustee McNicholas- we did re-negotiate the lease correct?

Board Audio at 176:25

Clark Hampton confirmed that the lease was renegotiated. Month to Month lease $11,000 per month.

Since we renegotiated the lease, Allen Cadillac does know we are planning to sell the property?

Board Audio at 176:35

Clark Hampton responds - If they don't... they will know soon.

[Laughter]

Board Audio at 176:37

And we have notified the City that it is up for sale again?

Board Audio at 176:35

Clark Hampton responds - yes we are having discussions. False Statement - see: PUBLIC RECORDS REQUEST and the City of Laguna Niguels' response.

Board Audio at 176:40

Moved by Amy Hanacek. Second by Trustee Jones.

Item Passed 5-0-2 (Trustee Pritchard and Reardon absent)