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Board approves Liberty Station compensation agreement amid legal dispute over valuation
Summary
Trustees voted unanimously to approve a compensation agreement with the City of San Diego for Liberty Station properties after contested public comment and legal briefing about whether a 2011 tax‑lien valuation or market value should govern; city counsel and district general counsel said state dissolution law and Education Code offsets apply.
The San Diego Unified Board on April 14 approved a compensation agreement with the City of San Diego covering certain Liberty Station properties, concluding a contentious public discussion in which outside counsel, community members and city officials disputed statutory valuation rules and whether the district could receive upside if the city later sold property at current market value.
Opponents — including counsel for the Seligman Group, Grace Cho, and consultant Mitch Mulholland — told the board that recent practice and redevelopment law may allow the district to share in current market value proceeds or at least to compel more negotiation over valuation. Cho argued that Health and Safety Code Sections 34191.3 and 34191.5 and the long‑range property management plan (LRPMP) could govern transfers and valuations.
The city’s representative, Michael Wong, said the city intends to retain ownership of the sites and that the state dissolution statutes require compensation agreements that use an oversight‑board‑approved appraisal and a tax lien valuation date such as 2011 in certain circumstances. Wong urged board approval and said the city has approved funding to make required payments to affected taxing entities if the agreements are finalized.
General Counsel Andrea Green briefed trustees on Education Code offsets and said funds paid under dissolution compensation agreements are treated as a reduction in the district’s state apportionment rather than an additive district revenue. Trustee Hazen, supporting approval, said she relied on counsel and the city’s indications that the city intends to retain the property and that state law will offset any district receipt.
Public commenters including community members warned that accepting historically dated valuations could shortchange district revenues if the city later monetizes the site at higher prices; other speakers urged the board to approve the agreements to settle long‑outstanding matters and avoid protracted litigation.
The motion to approve the compensation agreement was moved, seconded and passed unanimously.
What’s next: The district will execute the agreement with the city; per counsel, any compensation amounts will be applied in state apportionment calculations and do not increase the district’s net general‑fund revenues.
