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Board agrees to offer 700 Font Boulevard to San Francisco State for $11.1 million, to defease district debt
Summary
The San Francisco Unified School District voted to offer 700 Font Boulevard to the state for $11,100,000; staff said proceeds would be used to defease outstanding certificates of participation, saving the district roughly $850,000 a year in debt service.
The San Francisco Unified School District voted April 10 to offer the district‑owned property at 700 Font Boulevard to the California Department of General Services acting on behalf of San Francisco State University for $11,100,000. Deputy Superintendent Myung Lee read the staff recommendation and said the district plans to use the proceeds for facilities‑related purposes, chiefly to pay off outstanding certificates of participation (COPs).
"We are recommending a transaction in the amount of $11,100,000 that we sell this property to the state…" Myung Lee said while reading the staff report. The district identified roughly $10.4–$10.5 million of outstanding COPs tied to a 1999 issue that it proposed to defease with sale proceeds.
Chief financial staff said paying down that debt would eliminate an annual principal-and-interest payment and free approximately $850,000 a year in general‑fund cash flow for the next 16 years. Joe Grazioli, the district chief financial officer, described the transaction as a way to preserve operating dollars by prepaying long‑term debt.
The sale terms include market‑standard representations by the district and broker compensation to CBRE Inc.: 4 percent of the gross sale amount, with a credit back to the district of $107,000 (a net commission of roughly 3 percent), according to the staff presentation. Staff told the board the state’s Prop 1D bond funds have been an available funding source for the purchaser but those bond funds are set to expire June 30, creating a timing pressure to finalize approvals.
The board voted on the transaction and subsequent related bond and cost submissions by roll call; the motion passed with a unanimous recorded vote.
Votes at a glance: the board approved the sale offer for 700 Font Boulevard (motion passed by recorded roll call: 7 ayes); the board also voted to receive and submit actual cost information for related general obligation refunding bonds and to approve the amendment of policy BP 6109 (see separate article).
