.The Plot to Oust Randy Ward

The schools chief didn't quit; he was forced out by his boss. Although his smart property deal could pay off Oakland's debt, he also got caught between Jack O'Connell and Don Perata.

Randy Ward squirmed in his chair. The state overseer of Oakland’s schools was happy to describe his new job in San Diego, and smiled when he talked about his wife, two young children, and prospects of a quieter life. But he didn’t want to discuss the real reason he was leaving. “I don’t want to talk about anything that isn’t helpful,” he said.

Leaving, you see, was not Ward’s choice.

The official story is that Randy Ward resigned, but interviews and a review of hundreds of pages of public documents show that he was quietly forced out of his job. During the past eighteen months, Ward submitted at least a dozen requests for a contract extension. But each time, state Superintendent of Public Instruction Jack O’Connell ignored him, put him off, or refused.

All of this was unknown to most of the Oakland education community, which had vilified Ward as either O’Connell’s stooge or a patsy for state Senator Don Perata, author of the legislation that led to the state takeover. But Ward turned out to be a fiercely independent reformer — perhaps the best Oakland could have hoped for. He surprised nearly everyone by embracing and quickly implementing the educational ideas of former schools Superintendent Dennis Chaconas. He expanded the district’s small-schools program, attracted more than $25 million in corporate investment, and started to revolutionize how the district’s dysfunctional central office serves one-hundred-plus campuses. He also righted a decades-old wrong when he changed the way individual schools were funded, making sure Oakland’s worst schools got just as much money for teachers as its best.

Test scores rose steadily and Oakland became a national model for school district reform. Yet Ward’s achievements went largely unnoticed and unappreciated. In Oakland, teachers and politicians were preoccupied about losing control of their schools and suspicious of his every move. At school board meetings, wild-eyed activists stomped their feet and shouted, “Ward must go.”

In the state capital, Ward’s bosses also were unhappy. State Superintendent O’Connell never sought the sweeping reforms Ward championed. The changes met with resistance in Oakland, especially from union members, and O’Connell, who someday aspires to be governor, longed for less controversy. He and one of his deputies often clashed with Ward, sources said, and were so displeased that they sometimes berated Ward in front of his own staff.

But the biggest gap between perception and reality emerged this summer during the debate over the future of Oakland’s school district headquarters. Ward’s critics denounced him for pursuing a sale of the property, but the truth is he never wanted to sell it in the first place. He believed that the state had no business selling property that belongs to the people of Oakland. O’Connell eventually overruled him, and ordered the land put on the market.

Ward was reluctant, but he also was a good soldier. He and his staff promptly put together one of the best development deals the city has seen in decades. It calls for selling the district’s waterfront site to an East Coast developer for almost $6.34 million an acre, enabling Oakland to pay back much of its state debt and hasten the return of local control. By contrast, just last month the city council approved another deal to sell a vast parcel of publicly owned waterfront land for only $280,000 an acre — almost 23 times less money per acre than the deal brokered by Ward.

O’Connell sent Ward packing anyway, maybe killing the city’s best hope for finally turning around its troubled school district. But the state education chief remains bent on selling the property and paying off the district’s debt so that Oakland can put its financial problems behind it. In the meantime, the sale of the property is under attack from an unlikely coalition of antidevelopment activists and officials with ties to Senator Perata. Waiting behind the scenes is another developer anxious to get its hands on the property — only this one is seeking a huge and costly city subsidy. If that happens, it would be just the latest in a long list of sweetheart deals for the state senator’s friends.


Before Ward arrived in June 2003, his predecessor’s supporters quietly suggested that Perata had orchestrated the state takeover so his cronies could get hold of the school district property. There was little evidence to back up this theory and Perata denied it, but there was no question that whoever took possession of the land would be getting a prize. After the city completes its $200 million remake of Lake Merritt, the district headquarters site will be revealed as prime waterfront property. “For housing, it would really be spectacular,” Perata told the Oakland Tribune in May 2003.

At the time, Superintendent Chaconas also thought Perata wanted him fired because he had refused to put some of the senator’s closest friends on the school district’s payroll. In early 2001, Perata wanted his longtime pal, bond financier Calvin Grigsby, to sell the district’s $300 million construction bonds. But Chaconas balked because Grigsby had been indicted on federal corruption charges. The senator then dispatched an angry e-mail to Chaconas. “I have a list of persons or issues that have not been resolved,” Perata complained in the January 25, 2001 e-mail. “It makes me look a little impotent or ineffectual.” The senator then made a veiled allusion to the horse’s-head-in-the-bed scene from The Godfather as a figurative consequence for not complying with his wishes.

Shortly after the school district overspent its budget by $65 million, Chaconas was fired and the voter-elected school board stripped of its power. Ward immediately began to reorganize the city’s schools from top to bottom. After ignoring loud pleas from community members and closing a handful of poorly performing schools, he received threats, hired a bodyguard, and earned a reputation as Oakland’s most-hated man. But selling the headquarters property was not his priority. “He never wanted to touch the issue at all,” said Oakland school board president David Kakishiba.

Ultimately, Ward could not avoid it.

The idea of selling the property originated with the school board. In late March 2003, the board asked Perata to include a provision in his takeover legislation that would allow for the sale. At the time, they hoped the property would fetch a price high enough to pay off the district’s debt and quickly return local control. But after Ward arrived, he let the proposal languish for more than a year. Then in late 2004 a group of angry parents forced his hand.

Parents at La Escuelita Elementary had become increasingly frustrated by officials’ unfulfilled promises to rebuild their kids’ school. La Escuelita, which sits directly across from the district’s central offices, is a small warren of broken-down portable classrooms with a closed-off street for a playground. After meeting the parents, Ward and his staff decided to solicit bids for a new school and headquarters to be built on the current site. The plan also suggested including two small high schools that sit on the land. But selling the property was not an option for Ward. “He believed that any decision about selling the property should be done by the school board and not him,” Kakishiba said.

Instead, the battle over the decision will be waged between O’Connell and the Oakland City Council.


O’Connell’s predecessor gave Ward broad latitude during his prior job as state overseer in the bankrupt Compton school system. And by most accounts Ward did that job well, leaving the district in 2003 with a $20 million surplus. But O’Connell was more hands-on, and he and his deputies grew displeased with the uproar Ward’s reform ideas caused in Oakland, especially among the district’s union members. “He was way too independent for them,” said a source familiar with the situation. This account was confirmed by four other insiders, all of whom asked to remain anonymous for fear of angering O’Connell. “They wanted someone to come in and fix the finances — not rock the boat. He was way too ambitious.”

O’Connell and his deputy tried to bend Ward to their will. They scolded and embarrassed him, and were condescending and domineering, the sources said. The deputy, Gavin Payne, would deride Ward in front of others, treating him as if he were some ignorant underling. “It was so unprofessional,” said another source familiar with the situation. “I’ve never seen anything like it.” Ward, who has a thick skin and is a stern taskmaster himself (see “Caustic Reformer,” April 27, 2005), sat stone-faced and endured the abuse.

Yet neither man could come close to matching the educational accomplishments of Ward, who holds a doctorate in education, was a successful school principal, and had turned around Compton. Before becoming state superintendent, O’Connell hadn’t been directly involved in educating kids since the 1970s, when he was a teacher and then a school board member in Santa Barbara County. Later, he served for twenty years in the state Assembly and the Senate. Payne, meanwhile, had no educational background.

Through a spokesman, Payne said that his job sometimes included him being “the enforcer, the bad cop,” and that he had “frank and candid” conversations with Ward to ensure that O’Connell’s orders were followed. O’Connell, meanwhile, denied ever having mistreated Ward. “Your sources are wrong,” he said. “It’s not true; it’s not accurate.” But when asked to assess Ward’s job performance in Oakland, O’Connell hardly gave him a ringing endorsement. “I think he dealt with it like a professional,” he said.

But what is undisputed is that when Ward and his staff devised their plan for the headquarters property in February 2005, O’Connell changed it. The state superintendent was bent on selling the property and paying off the district’s debt so he could be credited with saving Oakland schools, sources said. So he inserted language that said the state would seriously consider selling the entire property. “I want the best result for the Oakland Unified School District,” he said.


When the 9.47-acre property came on the market, TerraMark LLC proposed buying all of it and erecting five condominium towers, including two that would be 37 stories high, making them the city’s tallest. TerraMark was founded by New York’s legendary Fisher brothers, who have built more than ten million square feet of office space in the past century, most of it in Manhattan. Over the years, the Fisher family has formed relationships with numerous politicians, including former New York Mayor Rudy Giuliani and Oakland Mayor Jerry Brown.

Company principal Reggie Livingston said TerraMark officials met Brown in the fall of 2003 through a friend they had in common. The mayor invited them to Oakland and told them about the city’s then-red-hot housing market and his so-called “10K Plan” for bringing ten thousand residents to downtown. They also learned of his love of tall, architecturally striking buildings.

The towers in TerraMark’s proposal were inspired by Manhattan’s famous “Lipstick Building,” an elliptically shaped, red and pink granite structure designed by Philip Johnson. “We want something that the people over there say, ‘Wow; what’s that?'” said TerraMark CEO Paul Bucha, pointing toward San Francisco during a school board meeting last month. “We want people to say, ‘Wow, what’s happening in Oakland?'”

To ensure that the proposal also wowed O’Connell, TerraMark hired two powerhouse lobbyists — Darius Anderson, who was ex-Governor Gray Davis’ chief fund-raiser, and Willie Brown, the former mayor of San Francisco and longtime Assembly speaker. With these two on board, TerraMark instantly became a top contender for the school district land. But three other developers also bid on the property, and one of them was emerging as a serious rival.

TerraMark’s main competitor could have been called “Team Perata.” It included an Oakland-based partnership, Strategic Urban Development Alliance, co-owned by Perata’s old friend Grigsby. The two have been tight since the early 1990s, and even after Grigsby was indicted in Miami, the senator claimed Grigsby had been unfairly targeted by the FBI. Then, after Grigsby was acquitted and returned to the Bay Area, Perata vowed to remain his friend. “I helped him, and will continue to do so,” he told The Los Angeles Times in 2004.

One of Grigsby’s main business partners is Alan Dones, who has been friends for years with former Perata aide and influential Oakland lobbyist Lily Hu. She has been on Dones and Grigsby’s payroll, and was the original focus of the federal public corruption probe targeting the state senator. Since 2000, the various members of the Dones-Grigsby team have donated at least $66,900 to Perata and a variety of campaign committees associated with him.

At first, Dones and Grigsby’s proposal appeared to match Ward’s vision. Their plan called for a new headquarters, an instructional campus of small schools, and a mix of market-rate and affordable housing. But it’s a complicated financial deal that requires the school district to spend $87 million of its own money, including millions that should be dedicated to paying teachers and librarians. It also proposed a bond-financing scheme that resembled a pact the same team recently signed with Alameda County. That deal, for which Hu had lobbied intensely, was labeled by county property manager C. Candace Fitzgerald as “an unconscionable waste of public funds” because the county agreed to pay the Dones-Grigsby team a staggering $140 million over thirty years to rent a building that cost only $32 million to construct.

Neither Hu nor Grigsby returned phone calls seeking comment for this story, but Dones acknowledged that Hu has been lobbying Oakland politicians for their proposal.


As the developers prepared their bids, the relationship between Perata and O’Connell unraveled. The two had once been friendly Senate colleagues, former teachers who usually agreed on education issues. But in early April 2005, O’Connell publicly criticized Perata after the senator suggested that Proposition 98, which guarantees public education funding, needed to be overhauled. “If I knew what Don believed, I’d try to defend Don, I guess,” an exasperated O’Connell told the Sacramento Bee. “But I’m not sure what Don believes.” He also was upset about Perata’s vote to block the reappointment of Netflix founder Reed Hastings to the state Board of Education. “I used to know Don Perata,” O’Connell added. “I disagree with him. I disagreed with him on Reed Hastings and about his comments on Prop. 98.”

A tall, lanky, clean-cut man with a boyish face, O’Connell is a San Luis Obispo resident who has a Midwestern nice-guy persona. But he was livid with his old colleague, and it wasn’t just because of Hastings and Proposition 98. Days earlier, Perata had introduced legislation that made O’Connell seethe. The bill sought to force him to hold a public hearing in Oakland every year, provide a detailed report on the condition of the school district, and then listen to local residents voice their opinions. “We made it very clear to him that it was not acceptable to us,” said Susan Lange, one of O’Connell’s deputies.

To outsiders, Perata’s bill must have sounded reasonable. But for anyone who has attended an Oakland school board meeting, it was clear why O’Connell was peeved. The meetings are often raucous, hours-long affairs punctuated by yelling and name-calling, especially by the more militant members of the teachers’ union. There’s always a target: Once it was Chaconas; later it was Ward. The one time O’Connell showed up, union members screamed at him, repeatedly interrupting his presentation, and then essentially booing him off the stage.

O’Connell’s staff thought Perata was merely grandstanding and that he wrote the bill to curry favor with parents and teachers upset at losing local control. But if that were true, the state senator went about it strangely. When he introduced the bill, he called no press conference — not even a photo-op. Throughout his career, Perata has been a master at convincing the local press to write about whatever he wants. Last month, for instance, he garnered numerous headlines when he came to Oakland to hammer out a plan that he said would finally address the East Bay’s spiraling murder rate.

Neither the senator nor his press secretary returned calls seeking comment for this story, so his motive is unclear. But Perata has a long history of using legislation to get what he wants. In 1999, he wrote a bill that pressured the school board into firing then-Superintendent Carole Quan and briefly replacing her with one of Jerry Brown’s deputies. That same year, he introduced legislation that helped him and Brown gain control of the Oakland Port Commission. Neither bill even needed to become law for the senator to get what he wanted.


When the senator’s friends submitted their $43 million bid, it included a favorable letter blessing the proposal from Perata’s closest political ally, City Council President Ignacio De La Fuente. But the offer’s fine print worried Ward’s staff. It suggested that the developers needed a substantial subsidy for the proposal to pencil out. The city of Oakland would have to hand over $33.2 million in property tax revenue to the Dones-Grigsby team, which would then return $17 million of it to the school district. It was a complicated way of hiding the fact that Dones and Grigsby would be paying only $9.8 million for the land.

TerraMark, on the other hand, offered $35 million in cash. And though company officials wanted the entire property, which Ward had been reluctant to sell, district officials still preferred this offer because it was straightforward enough to summarize on a cocktail napkin. TerraMark and its partner also had plenty of money. “Let’s put it this way,” said Ward, leaning back in his office chair and tapping his long fingers together. “It was pretty clear who the frontrunner was.”

But as his staff zeroed in on TerraMark, Ward suddenly learned that his job was in jeopardy. He had begun a quiet campaign to extend his contract, which was scheduled to expire June 30, 2007. In the education world, superintendents commonly request contract extensions unless they’re unhappy or plan to retire. Ward had sent several e-mails to O’Connell and Payne, asking to extend his contract another year. Although sources said Ward’s bosses verbally abused him, he still wanted more time to complete his reforms. “He accomplished a lot,” said a source close to Ward, “but there was still plenty more to do.”

At first, O’Connell simply ignored the requests, but then on July 28, 2005, the state superintendent sent the letter Ward feared most. O’Connell told Ward that he would not renew his contract, which meant that he was facing unemployment in 2007 if he didn’t find another job. “I want to express my sincere appreciation for your commitment and energy in serving the children of the Oakland Unified School District,” read the letter, a copy of which was obtained by the Express.

O’Connell said Perata never asked him to oust Ward. He also said that he and the senator are friends once again. But he acknowledged that the bill that sought to force him to visit Oakland each year was really just Perata’s “effort at gaining political power” over him. Then he said he couldn’t remember exactly what the senator wanted him to do.

This much is clear: Just a few weeks after O’Connell informed Ward that his contract would not be extended, Perata withdrew his bill.


Randolph Eugene Ward is nothing if not tenacious. Despite essentially being told to find a new job, the Massachusetts native pushed ahead with his reforms and searched for the money to pay for them. In November 2005, the foundations started by Microsoft’s Bill Gates, Dell Computers’ Michael Dell, and KB Homes’ Eli Broad announced that they would invest more than $20 million in the Oakland schools. The unprecedented donation would support the reforms that Ward and his staff developed with the Bay Area Coalition for Equitable Schools. A spokesman for the Bill and Melinda Gates Foundation gushed, “We are a proud partner of the Oakland Unified School District.”

Three years before, few would have dreamed that such foundations could have been persuaded to invest in the bankrupt and disgraced Oakland schools. But Ward’s toughest challenges still lay ahead. For more than a year, union members had been threatening to strike if he did not accede to their demands. After months of bitter negotiations, Ward and the union leadership finally reached a deal that gave teachers a 6.25 percent raise over three years.

With the labor strife comfortably behind him, Ward quietly planned his exit strategy. He interviewed with the San Diego County Board of Education to become that county’s next superintendent of schools. He was attracted to the job in part because his old boss, Carl Cohn, was the superintendent of nearby San Diego city schools. “I’m pretty excited about that,” Ward said as two half-full packing boxes sat on his office floor behind him. He began his career in Long Beach schools, and Cohn, who was the superintendent there for ten years, was his mentor.

But before he would leave Oakland, Ward had one more major task — the school property deal. In May, he and his staff gave the developers one final opportunity to sweeten their offers. The Dones-Grigsby team didn’t budge, but Ward and his staff convinced TerraMark to increase its bid from $35 million to somewhere between $45 million and $60 million. The company would pay the full amount if it received the entire 9.47 acres, and pay the lesser figure if the district decided to keep 3.2 acres to build a new La Escuelita.

The new TerraMark offer amounted to an eye-popping $6.34 million per acre. By contrast, in the recently concluded Oak-to-Ninth deal, the Port of Oakland got only $280,000 per acre when it sold Signature Properties — a Hu client and top Perata donor — 64 acres along the Oakland Estuary for just $18 million.

The TerraMark proposal also compared favorably with another deal Hu had lobbied for — the 2002 pact between the city of Oakland and her client Forest City. In that deal, the city agreed to hand over a subsidy of more than $60 million to Forest City, which is building seven hundred apartments on publicly owned land, and paying zero rent in return.

TerraMark, on the other hand, hopes to construct twice as many condos without taxpayers’ help. The deal would enable the district to pay off much of its state debt in five to seven years instead of twenty. Under the plan, the state could move the district headquarters and at least one of the high schools on the property into schools Ward closed in 2004. And if the state were to accept TerraMark’s lower bid of $45 million for 6.2 acres ($7.5 million per acre), then it could build a new campus for a small high school and elementary school on the remaining three acres. The district already has $22 million in construction funds set aside for such a project.

After Ward and his staff recommended the TerraMark deal to O’Connell, the state superintendent quickly signed a letter of intent with the company. Most of Ward’s major tasks were now finished, but he still wanted to stay in Oakland. He continued to ask for a one-year contract extension. E-mails obtained by the Express show that he repeated his request in November 2005, and again in February, April, and May of this year. The last one was dated June 16. Each time, however, he was denied. He finally got the message, and on June 28, the 49-year-old announced that he was going to be the new San Diego County superintendent of schools.


Despite Ward’s accomplishments, some Oakland activists and union members still viewed him with contempt. At a July 12 public hearing, local progressives packed the boardroom to denounce the TerraMark deal. It was not surprising; many of the same people have opposed nearly every major development in Oakland since Jerry Brown took office. But what was surprising — at least for those unaware of what had happened behind the scenes — is that the progressives were joined by community leaders and pro-development officials with ties to Perata.

Among them was Lillian Lopez, a leader of Oakland Community Organizations, the most influential grassroots group in the city. Lopez, who is close to De La Fuente, told the standing-room-only audience that if it were not for Perata there would have been no public hearings. Ward said later that her claim was untrue.

Another opponent at the public hearing was school board member Noel Gallo, also a close ally of De La Fuente’s. In an e-mail dispatched a week later, Gallo argued that the TerraMark proposal was “nonresponsive” because it did not include a specific provision for including La Escuelita or the district headquarters in the condo project. He then pushed for a hybrid “education center” of schools and homes. He never mentioned Dones and Grigsby by name, but his proposal mirrored theirs.

The most vocal opponent of the deal has been City Councilwoman Pat Kernighan, who is backed by Perata and is an ally of De La Fuente’s. At a public meeting one week later, Kernighan derided the TerraMark proposal as “a bad deal,” “a stinky project,” and “a crazy, crazy deal.” But like Gallo, she didn’t speak out against selling the property — she just didn’t want it sold to TerraMark. Kernighan said her primary objection was that the total amount of money the company will pay the district depends on how many condos the city council approves. If the council orders TerraMark to build fewer units, then the district will receive less money, she warned. “I can’t imagine anyone who would enter a deal that bad,” she told members of the Metropolitan Greater Oakland Democratic Club on July 20. “There’s no way in the world that anybody should support it.”

Yet just two nights earlier, Kernighan herself wholeheartedly supported a different deal containing a somewhat similar provision. The Signature Properties’ pact for Oak to Ninth stipulated that if the council turned down the condo project, the entire deal would be scuttled. Kernighan also failed to note that the pro-development council has never asked a developer to build fewer housing units in a major development during the Brown administration. On the contrary, council members were greatly disappointed when Forest City’s original proposal to build two thousand units plummeted to seven hundred, and then cheered when Signature’s jumped from two thousand to 3,100.

Nonetheless, all eight current council members, including De La Fuente, have now come out against the TerraMark proposal. So it’s clear that if O’Connell finalizes the deal in the next month, it will face an uphill battle. If the council kills it, Dones is ready to step in. “Absolutely, we’re interested, should the opportunity arise,” he said.

Consider this precedent. Before Brown and Perata gained control of the Port Commission, the port agreed to sell Jack London Square to a San Francisco developer for $44 million. But after Brown had appointed a majority of the commissioners, that deal fell apart and was replaced with one involving Perata’s former chief campaign fund-raiser, James Falaschi. The new deal, which sparked outrage and calls for a federal probe, allowed Falaschi and his partner, Hal Ellis, to buy Oakland’s top tourist attraction for just $17 million. The port then agreed to pay the two $10 million to build a new parking garage and improve “public access,” $1 million a year to manage the square, and $5.5 million a year from rent proceeds generated by the square’s tenants. In other words, the port had given Perata’s friends millions of dollars to take Jack London Square off its hands.

A similar opportunity may arise for Dones and Grigsby. Although O’Connell appears determined to push forward with TerraMark, the city council has final say over development in Oakland and can place numerous regulatory roadblocks in the company’s path. Perata also has plenty of leverage. If O’Connell wants to be governor someday, he’ll need the backing of the state Democratic Party, and Perata is one of its leaders and top fund-raisers. As senate president, he also enjoys considerable power over the state budget. And his bill forcing O’Connell to visit Oakland remains valid until the current legislative session ends on August 31. Even if it expires, he can reintroduce it in December.


Last week, however, TerraMark made a new offer that may be too difficult for O’Connell to refuse. The company said it would not only pay $60 million for the entire 9.47 acres, but would lease back 3.2 acres to the district for $1 a year for 99 years. That way the district can still build its new elementary school and small high school on the site. The new offer amounts to a whopping $9.57 million per acre.

In an interview with the Express and in his letter to Ward, O’Connell said he was denying Ward’s requests for a contract extension because it was time to start planning the return of some aspects of local control to the Oakland school board next summer. But his track record suggests otherwise. Last year, the state’s Fiscal Crisis and Management Assistance Team recommended that the school board begin to regain some of its power. But O’Connell ignored that advice, just as he ignored a similar request last month by board president David Kakishiba.

Meantime, the district’s corporate sponsors are concerned that Ward’s reforms may not be completed. If they aren’t, Oakland schools may never again attract significant private investment. Along with Gates, Dell, and Broad, Ward also persuaded local corporations such as Clorox, Kaiser Foundation Health Plan, and Dreyer’s Grand Ice Cream to pledge $5 million. It marked the first time that large Oakland businesses had invested in the city’s beleaguered school system. “They invested because the saw a bold plan and a promise of success and they were willing to pay for that,” said Steve Jubb, executive director of the Bay Area Coalition for Equitable Schools, who partnered with Ward in the fund-raising effort. “Now, if we don’t do what we said we were going to do, they won’t be back again.”

O’Connell said he was committed to continuing the reforms, and Ward expressed confidence in interim state administrator Kimberly Statham, who was one of his lieutenants. But Statham has no record as a reformer, and some of Ward’s other colleagues are quietly miffed. They believe he should have stayed until the end of his contract so he could finish what he started. But there are no guarantees that another job would have been available next summer, nor that he would have been selected. Despite his successes in Oakland and Compton, Ward has baggage. School boards are reluctant to hire former state administrators accustomed to unfettered authority. After Compton, Ward was turned down for a superintendent’s job in Dallas, and in San Diego, he needed a reference from his old mentor Cohn to obtain a job for which he is overqualified.

Reformers like Ward don’t tend to become county superintendents. That’s a job for a pencil-pushing administrator, whose primary responsibility is keeping tabs on the finances of other school districts. “I think he’s going to be bored to tears,” said one person close to him. But at least Ward won’t have to deal with bosses who ridicule him. He’ll also probably have shorter hours, so he can spend more time with his wife and kids.

In the end, Randy Ward proved just about everyone wrong, and it likely cost him his job. It also may have cost Oakland its best chance at finally having a decent public school system. And it will certainly cost taxpayers plenty if they’re saddled with another sweetheart deal for one of Perata’s friends. “He was nobody’s stooge,” Jubb said. “He was and is his own man.”



Why the Editorials Are Wrong
The TerraMark deal makes financial sense for the school district.
By Robert Gammon

The proposal by TerraMark LLC to buy the Oakland schools headquarters’ property has been strongly criticized by the Oakland City Council, and school board members. Both the Oakland Tribune and the San Francisco Chronicle have editorialized against it. But a closer analysis of the deal, along with interviews with its creators/compilers, reveals that several of the opponents’ primary criticisms are just plain wrong.

One of the leading arguments against the deal is that the $45 million to $60 million sales price will be offset by the high costs of moving the three schools, two small childcare centers, and the central offices that currently occupy the property. Those costs, critics contend, will thereby block the district from paying off most of its debt to the state – which currently stands at $91 million, according to the school district’s CFO Javetta Robinson.

That criticism is a red herring. Here’s why: School districts have two large pots of money from which to pay major bills – – the general fund and the construction fund. Oakland’s general fund is $91 million in the hole, but thanks to voter-approved bond measures, its construction fund is flush with cash. Oakland can’t use any of this money to pay off its debt – – former schools Superintendent Dennis Chaconas learned that the hard way. But Oakland can use these funds to move schools, according to Randy Ward. In other words, the city could move schools using money it has on hand, while TerraMark could help retire the bulk of the district’s debt.

Moreover, the TerraMark deal would not require the district to move all the schools. The district could accept the $45 million purchase price – – or the new $60 million offer – – and still have three acres upon which to build a new elementary school and one new high school. The district already has $22 million set aside for such a project, said Tim White, the district’s head of facilities. Finding new space for the childcare centers should not be that difficult, and Ward said the district could move one of the two small high schools and the central offices to the school campuses he closed in 2004.

This proposal far outstrips the one submitted by TerraMark’s main competitor, the Dones-Grigsby team. That team is offering $43 million for the land, but it also would require the school district to spend $87 million of its own money to build the new schools and new central offices. The district could use construction funds for the new schools, but not the offices – – it would have to dip into its bankrupt general fund for that. Moreover, the Dones-Grigsby team wants a $33 million tax subsidy from the city to help pay for the project. In other words, the Dones and Grigsby proposal would require $120 million in public funds: $87 million from the school district and $33 million more from the city.

Their plan also appears to violate state law by calling for condos to be built right next to the new schools. White explained that this would allow adults who have not been fingerprinted or undergone background checks to be closer to schoolchildren than permitted by law.

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