1080 Bush Street

San Francisco City Attorney Dennis Herrera filed suit against the Academy of Art University today, alleging that the institution “schemed to violate state and local laws in its aggressive acquisition and use of vast real estate holdings in San Francisco.”

As we first reported earlier this year, over 80 percent of the University’s 40 properties in San Francisco are operating illegally, including nine buildings and over 250 units of housing which are ineligible to be permitted or even legalized for student use without legislative amendments to San Francisco’s existing Planning Code.

As we also wrote at the time:

The legislative amendments, however, would result in the loss of at-risk uses the City is on the record as fighting to preserve, including residential housing and Production, Distribution and Repair (PDR) space. And as such, it will be interesting to see how the City approaches these sites.

And now we know.

Herrera’s complaint contends that AAU has unlawfully deprived San Francisco of some 300 residential dwellings that are desperately needed in the midst of a severe affordable housing crisis. The suit also alleges that the AAU defendants’ unfair and fraudulent business practices have illegally denied San Franciscans their rightful role in neighborhood planning decisions, and disadvantaged honest competitors in the city’s real estate marketplace.

Or in the words of Herrera (or at least his press team):

“Academy of Art University is one of San Francisco’s most egregious land use scofflaws, and its defiance persists at the worst possible time for our residents.

For more than a decade, city officials have worked cooperatively with AAU to try to resolve its rampant violations. We extended every professional courtesy, and showed patience beyond what I was sometimes happy about, quite frankly. But no one can doubt San Francisco’s good faith in working with AAU. And yet — again and again — AAU met our good faith with bad faith. Again and again, AAU sought more time to address its violations, even while scheming to commit new violations, at newly purchased properties. Again and again, AAU set deadlines it missed; made promises it broke; and hired lawyers it soon after fired—simply to frustrate progress toward resolution.

With our lawsuit today, the ‘again-and-agains’ end.”

The litigation seeks a permanent injunction compelling the Academy of Art to restore all the units that they “unlawfully displaced from San Francisco’s affordable housing stock” and abate all violations, along with penalties of no less than $200 per day for each violation of the San Francisco Planning Code, up to $2,500 for each act of unfair or unlawful business under the California Business and Professions Code, as and all attorneys’ fees and costs of pursuing the civil action. Problems with estates/property can be sorted out through the proper legal channels, luckily they are doing that here with lawyers who are like Caldwell Wenzel Asthana, hopefully this will yield the right response and the courts will respond positively to that

Comments from Plugged-In Readers

  1. Posted by Ludy Rudy

    about time.

  2. Posted by Jackson

    That City Attorney Dennis Herrera is now taking action against Academy of Art, affirms his plans of running for some office. Mayor, perhaps?

    • Posted by ess

      Nice try.

    • Posted by Jake

      Dennis Herrera was elected to his third term as City Attorney just this past November. He received more votes (154,336) than anyone else for any office, including the mayor and the DA, and he got more votes than any of the ballot initiatives. He also received the highest percentage of votes cast 98.73% of any entry on the ballot. Popular guy.

  3. Posted by Adam

    Never thought it would actually happen.

  4. Posted by Jimmy The House Flipper

    He’s just a hater tryin’ to throw salt in their game.

  5. Posted by SFRealist

    I’m not always a fan of Herrera, but I’m with him 100% on this.

    A small time property owner would never have got this much leeway (nor would they afford to hire Brosnahan as their lawyer)

  6. Posted by Futurist

    I’ll bet not a damn thing against the Academy happens from this. The City has turned a blind eye to their disgusting and illegal practices for years. Why should it change now?

    • Posted by jj

      I agree. The only reason this is happening is because it has been the subject of media scrutiny. This has been going on for how many decades now, and nothing has been done?

      The AA family is big time SF money/ aristocracy. We live in a plutocracy where the rich are immune to prosecution. It will go away once the media pays attention to something else for a while.

    • Posted by SFRealist

      I hope you’re wrong….but you’re probably right

    • Posted by Pablito

      Yep. Once the media is not paying attention it will go back to ” business” as usual.

  7. Posted by Neighborhood Activist

    I’m sadly agreeing with Futurist, but I’m glad to see it happen anyway. If nothing else, it’s a shot across their bow.

    AAU is a sham school (look at their graduation rates for a hint) who probably also should be investigated as a visa mill for international “students.” BTW, they’re the ones occupying all the “student housing” where real SF residents used to be able to live.

    • Posted by Jimmy The House Flipper

      Hold on a second… if the students live in buildings in SF, aren’t they SF residents too?

      • Posted by Pablito

        Dr. Suess wrote a good book on this. Explains exactly who is considered a “legitimate” San Francisco resident or not by the City. It’s called “The Sneetches”.

  8. Posted by Amewsed

    AAU already made a public settlement offer in response to this highly publicized civil lawsuit. Tit for tat. Both parties should and will settle all of the outstanding claims and violations once and for all privately. The City will run into statute of limitation problems with stale claims and will be estopped from bringing those in court.

    Judges frown on this type of media circus especially when the City’s own code enforcement is arbitrary.

  9. Posted by RussianHillDweller

    Couldn’t have happened to a more deserving organization!

  10. Posted by soccermom

    Somehow the, “We can’t let THOSE people live in THAT building. We need a DIFFERENT kind of people living there” argument rings fairly Trumpian to my ears. “THEY NEED TO FOLLOW THE RULES. WE HAVE RULES FOR A REASON.” Yes, still sounds the same as immigration fear-mongerers. Maybe we can build a wall and keep out the students.

    If their school is unfairly taking advantage of federal funds and doing a poor job of educating them, that’s one thing. But fixating on where the students live? A political sideshow.

    • Posted by Fishchum

      If the AAU wants to house their students, fine – but they can damn well follow the same Planning rules like everyone else.This has been going on for years.

      • Posted by soccermom

        Just like the Mexicans over the border. RULE BREAKERS! LET’S SUE THEIR AXXES!

        What is the essential difference between housing students and housing people who are not students?
        Is this about noise complaints?

        This issue doesn’t seem like a big deal to me in the greater scheme of things.

        • Posted by Fishchum

          There’s a big difference between Mexicans fleeing poverty to find work and a multi-million dollar for profit school blatantly ignoring City and Planning Codes to illegal convert multi-residential buildings and avoid paying fees.

          If you can’t see the difference between the two I don’t know what to tell you.

          • Posted by Pablito

            Hmmm. The Students and the Mexicans are both poor. They are both exploited by multimillionaire for-profit businesses. The business exploiting the students ignores the zoning codes, the businesses exploiting the Mexicans ignore minimum wage and health and safety laws. But it seems pretty similar to me. A person needing a place to live is just a person needing a place to live…

          • Posted by Fishchum

            @ Pablito – but that wasn’t Soccermom’s comparison. She (facetiously) compared suing Mexicans entering the U.S. illegally to the AAU, as both groups have ignored the law.

          • Posted by soccermom

            There’s a common thread of self-righteous indignation here that refuses to acknowledge its own xenophobic nature both in the simplistic Trumpian rejection of hard-working Latin American immigrants and the distaste of (apparently) many with the willingness of the AAU organization to allow students to reside in residential housing that has not been blessed as student-worthy by our city planners.

            Again, I think this is a political sideshow. How is Herrera’s office’s investigation of the Mario Woods execution by city police officers going? Oh wait, there is no investigation, because the execution has already been determined to be ‘lawful’ by Herrera’s office. Instead of chasing real matters, the city attorney seems to answer a NIMBY dog whistle to attack the voter registrations of a single pro-construction individual, and now this, to call out a privately owned school for allowing the wrong kind of people to live in the right kind of buildings.

            We bemoan that the city is changing. The city is tough on young people and artists. Yet the net effect of letting AAU to house students in the city is, as far as I can tell, to have more young people who are interested in art, living in the city.

            I’m outraged by a lot of things in San Francisco. If you can watch the video of Mario Woods being gunned down and not be outraged, then I would find it difficult to reconcile my world view with yours. But being bent out of shape because some young kids live in residential buildings?

            By all means, if they are running a sham school, go after the AAU for that (and Trump, and ITT Tech or whoever else is taking unfair advantage of kids and leaving them in debt up to their eyeballs.) But to chase the educational institution based on how they house students, is silly.

          • Posted by Jake

            Many of the AAU buildings in violation and covered by this complaint have nothing to do with housing. They’ve illegally converted (non-residential) commercial buildings to use for classes, in addition and apart from their illegal residential conversions. From the first paragraph of People v. AAU complaint filed by the SF City Attorney:

            “Defendant AAU also acquired buildings with office space, only to unlawfully covert them to classrooms and shrink the amount of already scarce office space available for San Francisco businesses.”

            There is nothing about the city’s complaint that says any housing is or isn’t worthy of students. AFAIK, the students have as much right as anyone to compete for housing in SF or nearby counties from which they could commute to classes in SF. I recall multiple times soccermom herself recommending Vallejo for those looking for lower housing costs within a tolerable commute of SF. What they should not have is any special privilege conveyed to them to access housing illegally converted by the AAU for the exclusive use of their students. Though, of course, SF is suing AAU, not the students.

            FTR, the Obama admin tightened up the regs on for-profit colleges recently, though not clear if that has affected AAU’s biz much.

            As to this being a sideshow, well, the city attorney’s office better be able to run a multi-ring show, as that is the circus among us in Badgag by the Bay.

          • Posted by soccermom

            Students, especially those that may be at risk not to complete their chosen paths of study, ought to live near their campuses. It does not make sense to suggest that students move to Vallejo.

            Working adults ought to make living choices that are consistent with what they desire, and if certainty and savings are desired, they should live and own in an area commensurate with their income.

            Anecdotal case in point: My sister-in-law teaches part time at NYU. Her students live in various locations in the city, but primarily in NYU-owned housing. This proximity to campus contributes to their success. My sister and brother-in-law live in Northern New Jersey, not in any glamorous town, but one where hey could have a yard and a garage, and a small 3/1.5 for ~$400K. They commute (the horror)! They are working adults.

            I find the use of offices as classrooms perfectly reasonable. You may have more pity for the marginal office user than I do, but I really don’t see any meaningful difference in use, beyond some master-planning pie chart that was concocted years ago and does not add any value to our city.

            I suppose I am biased toward encouraging education.

          • Posted by Jake

            Most of these students are adults and many of them are working adults. If they can obligate themselves for the yuge tuition AAU charges, then they can decide where to live.

            In most cases I would also “find the use of offices as classrooms perfectly reasonable” and so would SF Planning. It’s not that AAU applied and got turned down. They just don’t bother to follow the law. Why should they when they can get away with it for decades?

            Whatever the merits of subsidized housing for college students, they shouldn’t be accomplished illegally.

        • Posted by Adam

          I think you suffer from a fundamental misunderstanding of this issue. Nobody is mad about the students, they are frustrated with the school. Which it should be pointed out again, is a for-profit business that occasionally hands out diplomas.

          • Posted by modernedwardian

            @ soccermom: al capone was jailed on tax evasion.

            i have no problem with the government using whatever strategy it can to go after power with power. the AAU certainly will use their funds and connections and very expensive lawyers to fight this – which has served them well in building this illegal house of cards for …how many years?

            the student loan scam would require a class action which our current climate seems to frown upon. look at all the people in default on loans nationally from “educations” at for profit colleges, (large political donors). in order to milk to student loan system, AAU needs a way to house their victims. small transgressions beget larger ones.

            be it sartre, malcolm x, or in this case the government, i’m fine with by any means necessary here.

            as for mario woods, if we had a student loan system that served students, and free public college (go bernie), and if we banned for profit prisons, who knows, he might be alive and in college. the two are not as unrelated as you posit.

          • Posted by soccermom

            Al Capone killed people.

            The AAU might give kids unrealistic expectations about the economic value of a visual arts degree.

            Is the city worse off with a bunch of art students wandering around? I say no.

          • Posted by Jake

            The art students can wander around without benefit of illegally converted housing. And the city would certainly be better off if dozens of buildings were brought within the law.

    • Posted by Jake

      A comparison with Trump is apt. Trump University’s high academic standards. Trump’s many developer and property owner scandals, including one in NYC where he tried to intimidate rent-control tenants to move out so he could redo the building for a different kind of people that would pay more. Years of schmoozing with and funding politicians to cut him favorable deals, defer investigations, and deflect punishment.

      Yeah, a fairly Trumpian playbook. Maybe Elisa Stephens will run for Mayor to make SF grandiose again. Laws are for losers and little people.

      • Posted by SFrentier

        I agree. (Phew…glad those sort of RE shenanigans don’t happen here!)

  11. Posted by Defu

    Enforcement kabuki.

  12. Posted by Tom McCabe

    It is the leftist’s greatest fear, that having layered vast regulations on the backs of property owners and working people, that the people will choose not to obey these coercions.

  13. Posted by J Biesek

    My daughter transferred after year two – from a solid (traditional) east coast university to AAU. She adapted well, and knew that the creative arts industry was going to require lots of hustle to succeed. She valued the AAU format, worked hard in all courses – and harder still, to earn intern gigs (which earned referral letters, and part time gigs with a few professors). She is now actively working in the industry – earning money and making her way in her chosen field. For her – AAU was a great fit. Studying under professors who were also working professionals was a huge jump-start / benefit.

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