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  • On Monday, the Natomas Unified School District responded to the Sacramento County grand jury's findings about of a land purchase the district made in 2007.

    Finding: The Natomas Unified board and superintendent did not exercise proper oversight of the land acquisition.

    Response: Do not concur

    Finding: Obtaining a single appraisal under the protection of attorney-client privilege does not allow for transparency in the purchasing process.

    Response: Concur

    Finding: The superintendent's solicitation of a contribution for a foundation from a party related to the seller of the property during negotiations reflects poor judgment.

    Response: Concur in principle

    Finding: The attorney retained by the school board failed to make the district and superintendent aware of his past dealings with West Lakeside LLC and AKT Development and the conflict of interest.

    Response: Concur, with additional remarks

    Finding: The assistant superintendent and the district were involved in instructing the appraiser as to the assumptions he should use. The appraisal contained false and misleading assumptions that inflated the sales price paid by the school district. Standard appraisal practices were not followed.

    Response: Concur

    The report: To see the full grand jury report, go to www.sacgrandjury.org.
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Natomas school board deflects blame in purchase of overpriced school site

Published: Tuesday, Jun. 30, 2009 - 12:00 am | Page 1B

Natomas Unified School trustees are defending district officials and blaming a lawyer and a real estate broker for the inflated price paid for a 41-acre school site.

"The district was misled, if not taken advantage of, by these consultants," trustees wrote in a response made public Monday to a May grand jury report.

The report criticized the district for paying $325,000 an acre, or $13.3 million, for the farmland – six times its actual value. It said the single appraisal on the property was based on land with houses that could be annexed to the city. City officials told The Bee last year that annexation of the property was improbable.

The property, sold by West Lakeside LLC, a partnership headed by developer Angelo K. Tsakopoulos, also has environmental issues that prohibit building on much of it. The district is planning to build a bioscience magnet school at the site.

In their response to the grand jury report, the school district trustees disagreed that they had failed to properly oversee the land acquisition. They called themselves "generalists" who had relied on a real estate broker and an attorney to help acquire property "during years of huge student population growth in the district."

When the property was purchased in 2007, Mark Skreden was listed as the broker for the seller, although he started out representing the school district, Natomas Unified officials told The Bee last August.

Martin Steiner, who was hired by the district to oversee legal aspects of the purchase, only revealed he had worked for the seller, West Lakeside LLC, three months after escrow closed, according to the grand jury report.

"It is unfortunate and painful to discover … that the district's trusted advisors failed to disclose the connection between themselves and the seller and failed to secure an appropriate appraisal for the West Lakeside purchase," said the district's response.

Neither Skreden nor Steiner returned calls Monday for comment.

The grand jury recommended that the school board file a complaint against Steiner with the California State Bar. The trustees said they had already filed a complaint, but the bar chose not to pursue it.

The trustees also had strong words for Skreden, saying he provided "invalid" comparisons for the appraiser. Trustees said the broker personally gained because his commission was based on the property's purchase price.

The district's support of Superintendent Steve Farrar wavered only when trustees conceded that he probably shouldn't have solicited a contribution from the seller of the property for a board on which he sat. The solicitation took place during the course of property negotiations, the grand jury said.

"Despite the fact there was no impropriety, this solicitation may now appear questionable to many," said the district response.

The board disagreed with a grand jury recommendation that they sanction Farrar, saying it "is the superintendent's job to make these solicitations for major donations to the (Natomas Schools) Foundation."

The board said they have directed school officials to refrain from soliciting donations before or during contract negotiations.

"I think our response clears up any misconceptions that may have come from the grand jury report," board President B. Terri Burns said Monday. "We continue to proceed to get the funds back and are hopeful that will happen."

Burns said negotiations continue between the district and the seller.


Call The Bee's Diana Lambert, (916) 321-1090.


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