We were taught long ago that if it walks like a duck and quacks like a duck, chances are pretty good it's a duck.
The old adage came waddling back amid news late last week that AMG Communities-Jacobs, LLC, pulled out of the controversial $6 million property exchange agreement it'd reached with Eureka City Schools in December after the district declined its request to extend escrow past the November election.
It's a complicated, convoluted story, but here are the basics:
The school district had long been looking to sell the blighted, defunct property on Allard Avenue and seemed to have found a buyer — the California Highway Patrol — which held a community meeting to gauge neighborhood support and put down a $4 million offer.
Across town, meanwhile, a wealthy man was pitching a fit about the city of Eureka's plans to convert some municipally owned parking lots into apartment buildings to mitigate a pervasive housing crisis. This man — a conservative political megadonor named Robin P. Arkley II, who is of such stature that he was involved in the scandal that rocked the U.S. Supreme Court when it was revealed justices accepted lavish gifts without reporting them — isn't one to take such things lying down. So he did what some wealthy people do and started throwing money at his problem.
Arkley's company bankrolled the formation of a community group — Citizens for a Better Eureka — and brought in his high-priced, out-of-town lawyer (Brad Johnson) so it could sue the city to protect those parking lots. When that didn't seem to be going well, it bankrolled — and would eventually pour nearly $1 million and counting into — a ballot initiative that, if passed, will block the city's plans by adding cost-prohibitive requirements to the downtown housing projects. But knowing voters might prioritize people over parking, he made sure the initiative would also rezone the largest vacant piece of land in Eureka that is suitable for housing to accommodate that use.
But as soon as the initiative started circulating, news reports pointed out that same piece of land seemed soon to be sold to the CHP and thus wouldn't make up for the downtown housing developments the initiative sought to block.
Then — perhaps coincidentally — within weeks of the initiative qualifying for the ballot, a mystery developer approached Eureka City Schools with an offer that appeared too good to be true for the Jacobs site: a $6 million "property exchange" that would allow the district to pocket $5.35 million in cash, acquire a small house on I Street and sidestep a bunch of red tape. Who was behind the LLC newly formed to finalize this offer? Not Rob Arkley, both its spokespeople and Arkley's told us.
Then the quacking grew louder. We learned this mystery developer was being represented by Johnson, who not only negotiated the deal but signed the paperwork, making it seem a lot like Arkley was behind the effort. Again, the spokespeople insisted that wasn't the case. Then the district failed to redact some information from emails it released to the Journal indicating that the district's attorney, anyway, sure thought it was Arkley buying the Jacobs property. But again, Arkley's spokesperson said no, he'd thought about purchasing the property but that was before AMG entered the fold (coincidentally using both Johnson and a spokesperson also coincidentally on the initiative campaign payroll) and made an irresistible offer for the property at the center of his ballot initiative — an offer Arkley pledged to "know nothing" about.
This mystery buyer — again, clearly not Rob Arkley, according to the FAQ on its website — then proceeded to string the school district along, requesting repeated extensions, the latest of which would have left the deal hanging tantalizingly in the balance until after the November election, allowing Measure F proponents to point to it and ask voters to imagine the possibilities. The Eureka school board — which deserves all the criticism it has received and more for doing absolutely no due diligence when presented with a poison apple by shady characters — was right to end this charade.
The day after the board's decision came the statement from AMG, sounding like an email list of Arkley talking points just missing his standard "VTY" (very truly yours) signoff. It talked about Measure F as if it is sure to pass and dangled the prospect AMG would ride back in on its white horse to purchase Jacobs if it does. It touted AMG's monied investors' willingness to pay above market value in order to help the district (the kids!) and laid blame squarely at the feet of city officials' "strident opposition" to rezoning the property, creating a "political climate that is too risky for the size of investment needed to bring our vision for the Jacobs site into reality." (Never mind the fact that AMG never publicly articulated a "vision" for the property, and officials say the company never engaged with the city on any level about zoning or anything else needed to move its project forward.)
The thing is, in our experience, benevolent, community-minded investors rarely have an issue identifying themselves when making above-market offers to put more money in a school district's coffers. Why wouldn't whoever is behind AMG?
Maybe, just maybe, it's because they are talking the talk of someone with no intention of developing the Jacobs property, much less paying $2 million above market value to do so. Maybe they're walking the walk of someone who orchestrated this deal from the outset, putting less than $1,000 in nonrefundable money down in the process, to allow Eurekans to vote under the illusion they can have affordable housing and downtown parking, too.
Ultimately it will be up to Eurekans to decide what happens downtown, whether they believe a city that has gone through an open and transparent process to meet an urgent need or a wealthy businessman — recently dubbed Eureka's Scrooge McDuck in a statewide publication — and his million dollar, scorched earth campaign to save parking lots.