In a written request hand delivered on May 6, 2009 to an attorney for the Regents of the University of California, SFAI asked the UC Regents to transfer trusteeship in the SFAI 800 Chestnut property to the SFAI Board of Trustees.  According to the request, the "estimated current appraised value of the property is about $25 million." SFAI represented that such a transfer would "enable SFAI to further develop its financial strength and independence."  It would "also enable SFAI to improve its balance sheet which, in turn, would improve SFAI's composite score with the US Department of Education.  The transfer of title from the UC Regents to SFAI Board of Trustees would allow SFAI to account for the property based on its present value.  This would result in the composite score rising to a level where SFAI would not longer be required to place a standby letter of credit with the US Department of Education. This would free up financing which is used to support the standby letter of credit and eliminate the cost of the letter of credit."  For a copy of SFAI's request to the UC Regents, click HERE.

It appears that similar proposals for the transfer of trusteeship in 800 Chestnut were made in 1959, 1998 and 2002.  We learned all this from our public records request to the UC Regents.   

With its request for the transfer of 800 Chestnut, SFAI provided the UC Regents with SFAI's financial forecast through the year 2012.  In this document, SFAI estimates operating surpluses and net surpluses for 2009/2010, 2010/2011, and 2011/2012.   For a copy of SFAI's financial forecast, click HERE.

In a letter dated July 28, 2009, counsel for the UC Regents informed SFAI that UC "President Yudof is willing to move forward on SFAI's request for trusteeship of the Chestnut Street Property, as long as we preserve the University of California's remainder interest in the property."  UC counsel asked that SFAI's auditors verify that holding the property would allow SFAI to "include it as an asset for financial statement purposes."  UC counsel also asked to see records reflecting SFAI's financial condition, such as the most recent audited financial statement, which SFAI COO Espi Sanjana provided to UC in August of 2009.  For a copy of SFAI's Financial Statements and OMB Circular A-133 Reports and Schedules For The Year Ended June 30, 2008 with Independent Auditors' Report, given to us by the UC Regents, click HERE.

In addition, SFAI's auditor Almich & Associates prepared a composite score document for the year ending June 30, 2008 and stated: "I recast the June 30, 2008 composite score based on a property transfer that will net the Institute $23,500,000 in temporarily restricted net proceeds, as well an increase to PP&E and total assets of $23,500,000."  SFAI also gave the UC Regents an appraisal of the 800 Chestnut property.  

An email dated August 18, 2009 indicates that SFAI Board Chair John Sanger, a real estate attorney, would prepare the court petition and court order on behalf of SFAI for the transfer of trusteeship in the 800 Chestnut property from UC and SFAI.  (It's a small world, as Google shows.  John Sanger also has represented the UC Regents in a legal case in court. See HERE.)

The SFAI Action Group supports the proposal for the transfer of 800 Chestnut to the SFAI Board of Trustees.  This sounds like this could be great for everyone, from students to teachers. We appreciate the continued persistence in getting this proposal to the Regents for their consideration.  However, we ask that the SFAI Board of Trustees and the SFAI Administration involve the students, staff and faculty in the opportunities and benefits that may arise from the transaction.  

* Postscript. 

SFAI's audited financial statement is a public record.  In August of 2009, SFAI's Administration declined to give us SFAI's audited financial statement, despite federal law requiring that it be given to us upon request. The Obama Administration's Department of Education told us that it could give us such documents at no charge because it determined that such a disclosure would be in the "public interest."  The SFAI Administration's current campaign of secrecy and fear is unfortunate.  SFAI needs to be reminded that it is not a private club. SFAI is a non-profit public benefit corporation, which receives some taxpayer funds.  It is OUR school.