Orange Unified School District offers the following answers to some common questions regarding the District’s “Walnut Site,” consisting of approximately 9.77 acres of land located adjacent to Santiago Middle School on N. Rancho Santiago Blvd., in Orange, California 92869.
1) What is the Current Status of the Walnut Site?
From March 2016 until Mach 2020, Gregory Palm Farm and Jones Victorian Estate were both using the Walnut Site pursuant to a License Agreement (“License”). After month-long discussions, the License was terminated on March 9, 2020.
Although the District was not willing to extend the use of the Walnut site for the Gregory Palm Farm, the Jones Victorian Estate can submit a Facilities Use Agreement in order to continue using the parking lot for its events. Moreover, the District has been willing to discuss a new license arrangement with the Jones Victorian Estate for the use of a portion the Walnut Site for parking, if both parties agree.
Gregory Palm Farm
Most of the Walnut Site is currently vacant. However, the District was licensing a portion of the Walnut Site to Gregory Palm Farm owned by Burl Gregory (“Gregory”). The Gregory Palm Farm, prior to March 2016, used the Walnut site pursuant to a lease that had been in place for approximately 20 years.
This agreement was terminated when the District was in escrow with a developer to sell the Walnut Site and needed to allow the lease to end so that the Walnut Site could be sold. As an accommodation to Gregory – who wanted more time to sell his remaining palm trees – the District agreed to enter into the License for a one-year term in March 2016, with the requirement that Gregory sell all of the palm trees during the first six months of the License. The License was extended several times at the request of Gregory.
Jones Victorian Estate
The License also allowed the Jones Victorian Estate wedding business, owned by Michelle Gregory (“Mrs. Gregory”), to use a portion of the Walnut Site for parking related to its wedding business.
2) Did the District renew the contract agreement with the Palm Tree Farm at the Walnut
No. The District currently is updating the Long-Range Facilities Master Plan and has hired an experienced architect to facilitate the process with the governing board, selected committee members, and the community during town hall meetings. The architect will provide the District a comprehensive report with anticipated costs for recommended facility improvements. The District has received input from committee members to utilize surplus property to assist with the funding of potential improvement projects. After extensive discussions, the District has decided not to renew existing agreement with the Gregorys. The Gregorys have been given notice to vacate in accordance with License Agreement.
3) Is the District allowing the Jones Victorian Estate to continue use of the Walnut Site?
Yes. Although the use of the Walnut Site by the Jones Victorian Estate would terminate when the License terminates at the Palm Tree Farm, the District has been willing to discuss a separate license arrangement that would allow the Jones Victorian Estate wedding business to continue to use a portion the Walnut Site for parking. The District has already approved a request submitted by Mrs. Gregory to use the existing parking lot for upcoming events.
4) Why doesn’t the District allow the Palm Tree Farm to stay on the Walnut Site?
The District’s Board of Education has concluded that the Walnut Site is surplus property and that it is therefore in the District’s best financial interest to consider other viable options to utilize and/or dispose of the property.
Although the District is sympathetic to the Gregory Palm Tree Farm’s position, the District needs to maximize the all possible revenue, including that from the Walnut Site, to help the District meet its educational needs. Encumbrances, such as a lease or license, have the potential to negatively affect the success of completing a property transaction; therefore, prior to entering into a transaction, it is important for the property to be completely vacant.
5) I heard the District previously was in escrow to sell the Walnut Site. Is that true?
Yes. The District went through the surplus property procedures discussed above and conducted a public auction for the sale of the Walnut Site on September 10, 2014. Shopoff Realty Investments (“Shopoff”) submitted the highest written bid at Twenty Million Dollars ($20,000,000).
The District and Shopoff then entered into a Purchase and Sale Agreement in which Shopoff agreed to buy the Property for the bid price. The Purchase and Sale Agreement granted Shopoff a period of time, known as the Due Diligence Period, to review the Walnut Site in order to decide if it wanted to complete the purchase. If Shopoff decided, for any reason, that it did not want to purchase the Walnut Property during this period, it could cancel the purchase. This is what happened. Shopoff sent a letter to the District on August 17, 2015 terminating the Purchase and Sale Agreement.
6) Is the District still planning to sell the Walnut Site?
The California Education Code creates a process whereby school districts assess their real property, identify any real property that is not needed by the school district as surplus, and then dispose of the surplus property through a bid process. The bid process allows all interested parties to submit a bid to the District who then awards a purchase and sale agreement to the highest bidder.
At this time, the Governing Board is still considering all options to dispose of the Walnut site. These options include sale, property exchange and license agreements.
7) I heard the District is trying to make the Gregorys give the District the right to use Renee Street to access the Walnut Site in order to maximize the value of the property in a sale. Is this true?
No. The District is not asking the Gregorys to give them access to the Walnut Site from Renee Street. The Walnut Site has an access point that does not involve Renee Street.
If the prospective new property owners of the Walnut Property desire to have a second access point to the property, it would be their responsibility to negotiate with the Gregorys.
The Orange Unified School District educates approximately 28,000 K-12th grade students in the Cities of Orange, Villa Park, Anaheim, Garden Grove, Santa Ana, and unincorporated county areas. In partnership with our community, we provide a safe, equitable, and innovative culture of learning for each scholar to have a competitive EDGE as a leader. For more information, visit the Orange Unified website and follow us on social media.