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Academy of Art settles with city, pays $20 million in fees

Plus an additional $40 million in housing concessions

Michael Rivera

The longstanding grudge between the city and Academy of Art University, one of San Francisco’s biggest landlords, finally boiled over this year, with City Attorney Dennis Herrera suing the for-profit school in May.

Herrera accused the Academy of running a real estate racket by misappropriating buildings (many of them historic assets) for student housing and teaching space.

Phrases like "buying spree," "decade of lawlessness and defiance," "egregious land-use scofflaws," and "unauthorized, un-permitted, and wholly disallowed use” flowed freely.

But things turned quiet on that front almost immediately thereafter, with both the school and the suit keeping a low profile. Now, the San Francisco Chronicle’s Matier and Ross report that, just like that, the flap is over.

The Academy agrees to pay the city $20 million in fees over the next five years, $7 million of which will be used to purchase low-income housing.

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The school will also have to provide low-income housing for seniors, a deal that the city estimates will up the Academy’s total expenditures another $40 million. Several Academy sites will shut down, and enrollment will shrink in the future.

The $60 million figure may not seem particularly high, given the breadth of AAU’s lawlessness and the amount of time they spent shrugging off warnings. But it is roughly one-fifth of the school’s estimated net worth.

And the city can claim a victory just on the grounds of finally, finally getting AAU to pay attention and start playing ball with regulation, something it’s been remarkably casual about shirking in the past.

Unremarked on amidst all of this is a proposal scheduled to go before the Planning Commission in November that would have legalized the majority of AAU’s building uses citywide.

The Commission discontinued those items just before the scheduled November 17 hearing, and the Planning Department told Curbed SF that no new date for talks has been set.