Signal: Thank you both for joining us for the 100th "Newsmaker of the Week." You've made some news lately when the board voted to censure you, Ron, for allegedly violating the Brown Act by disclosing secret information from a closed session. The information pertained to property being accumulated for COC's Canyon Country Educational Center. Why not start off by telling us what the educational center will be?
MacGregor: I'd love to. I'd love to start. First of all, I just want to indicate that I know this is your 100th show of "Newsmaker," and because of that I brought you a T-shirt from the college. A gift. But basically what's interesting about it is on the back, it has, "EXPANDING" and that's what we're doing for our 36th year.
In our 36th year we're expanding in a lot of ways besides the University Center, which is actually the picture that's on the back of this T-shirt. I hope you enjoy it, wear it, wear it proudly, be part of our team. But in addition to our University Center, which is pictured there, we're excited because we're going to be building a Canyon Country center, and this is something that has been in the works a long time. We've tried for many years to put this together. We're excited that now it's coming to fruition.
We've purchased basically all but one parcel of our 70-acre site; we have our drawings ready to go; we have our portable buildings ready to go; and we're going to open next fall, a year from this coming fall, in 2006. So we're really excited about it and pleased that we're going to be able to serve students in the Canyon Country community.
This has been something that's been my lifelong passion since I've been on the board, because I live in that community (and) have for 35 years. So I'm excited about this coming to that end of the valley.
Signal: Ron, you've been on the board how long now?
Gillis: Ten years.
Signal: And Joan?
Signal: Ron, what is the need for a Canyon Country facility? Why Canyon Country?
Gillis: Well, Canyon Country is a growing area out here, and when you look at the criteria that the state requires to add another campus, they look at the population of the students that you have, and when you get to a certain number they figure out that you're going to need another campus.
Canyon Country is the area that they expect is going to really grow. And as Joan said well, she and I both live in that area, and it's just great and exciting to have a campus out there. It's going to be nice.
Signal: With the 20,000-home Newhall Ranch project coming online in the next 20 years or so, isn't there at least just as great a need on the west side of town?
MacGregor: Actually not on the west side, but in the northern part of our district. Our district is very large. We stretch all the way up to Gorman, which a lot of people don't realize, and as you know, there is going to be major development up in that northern corridor. We do eventually see that we will need to have another site up in that area.
There are restrictions, though, by the state. You cannot have two campuses within a certain radius. In fact, our campus in Canyon Country had to be this distance from the campus. We looked at other sites that were closer; they wouldn't have been approved.
So, yes. We will be seeing our College of the Canyons growing in the other end of the valley, too, but it will be in the northern end.
Signal: You mentioned 70 acres for the Canyon Country site. If you go up Sierra Highway north of Soledad Canyon Road and come to the old Honey House, that's the southern end of the property you're talking about. Go up to the gas station, and that's the northern end. Looking at those 70 acres it's vertical.
MacGregor: No, you haven't been on it. You have to hike it to see all the flat valley area that's back there. There is a lot of flat area on this parcel. We'll be using approximately 50 acres of the 70 acres for our site, and the rest of it we will not be touching, as far as some of the surrounding hillside. Which, we're pleased. Because obviously we don't want to have to grade that.
Signal: How much is flat?
MacGregor: Right now we probably have about 30 acres flat; we'll be grading. We will not be taking any dirt out of the site, nor bringing any in. Which is great. Meaning, we'll be able to use the dirt that's there, probably about a 70-foot elevation from Sierra Highway, and we'll have a couple of pads along Sierra Highway, possibly for some asset management in the future.
Signal: The Honey House is up against a mountainside; what does that piece of property do for you? Don't you take that down?
MacGregor: We'll be taking it down. I'll let Ron add a little bit here.
Gillis: We'll be taking it down and it's going to be almost like a terraced procedure, and as Joan mentioned, moving the dirt around, grading certain areas and filling in other areas. It should be a beautiful site by the time we get done.
Signal: This property assemblage is 10 different parcels?
MacGregor: Eleven. Well, we started with 11; we're only going to be purchasing 10.
Signal: You're purchasing 10 different parcels and you've been buying them over the course of the last how long?
MacGregor: Well, basically we started this almost a year ago. About 10 months ago we started the process of actual purchase and offers.
Signal: If you needed every parcel for the whole thing to work, why didn't you option the property?
MacGregor: Ron, would you like to answer that?
Gillis: I'm not sure what you mean by option, to tell you the truth.
Signal: Joan, you're a Realtor. Why didn't you enter into agreements with the property owners to
MacGregor: Let me explain. I'd be happy to. I didn't want to be taking over if Ron would like to add this. But let me tell you what actually occurred.
We had been looking for property for the last three of four years out in the Canyon Country area. As you know, to find 70 acres of undeveloped land is very, very difficult. So the site selection committee was out touring, of which I was the board liaison to that committee and served on that committee. So we examined and went in the riverbeds and we went on the top of the mountains, etc., etc., went all over. Basically we could not find a suitable parcel. We narrowed it down to one or two, but it was just not going to work.
We sent out an RFP (request for proposals), if you will, to Realtors in the valley saying: If you have any ideas, if you know any land owners that are interested in selling, please contact us.
We were approached by a real estate firm that said: We have letters of intent to sell, from owners in this group. We have put together this many sellers; they are not on the market; they are not actively listed; and they are willing to sell to the college; they are willing to sell their property.
It totaled a little over 70 acres, actually. So that's how we came across this particular site. Because we feel very fortunate. It was not on the market for sale. So again, that's how we came about this particular area.
Now, as far as buying the property, we individually went into offers and counter-offers and so forth with each individual owner. That has taken some time. We're pleased at this point in time to have five of those owners closed escrow, completely done. We have one remaining.
Signal: Was there a letter of intent for all 10 parcels?
MacGregor: (Yes.) Actually 11.
Signal: So in effect, are you saying it's kind of the same thing as having options, which would enable you to predicate one purchase on the consummation of all?
MacGregor: Let me explain. We had that provision in all of our offers, meaning it was all or none, meaning we would purchase them; if we didn't get them all, we wouldn't go through.
We dropped that contingency about halfway through the purchases because we realized we were eventually going to get them all. At that point we had done our testing, our soil testing; we had done all our environmental testing; we knew we were going forward and it was going to go.
So at this point, yes, we had that contingency clause in all of our initial offers.
Signal: What, then, has been the hang-up with the latest parcel that has been in the news? Is this the last parcel?
MacGregor: No. There's one in escrow one that we're negotiating on now. This one, parcel No. 6, just closed escrow (Wednesday). At our board meeting (Wednesday) night it was announced that we had closed escrow, at the board meeting, on (Aug.) 24th.
Signal: So it was not a situation where you were concerned since you had these letters of intent that a property owner might raise his price because he knew you were buying these other parcels?
MacGregor: I'll go ahead and answer that, too, if you'd like.
Gillis: I'll defer to Joan on that; that's her expertise.
Signal: Was the board concerned that a property owner would raise the price
MacGregor: Basically we went into this with that we would obtain fair-market value appraisals, certified appraisals, and that's what we would offer the sellers. They were accepting of that provision.
At this point in time and that's, again, last October-November when we started the process. But as you know, just as your home has gone up in value, so has vacant land in this valley gone up in value, and it's continuing to appreciate during this period of time. So appraisals that are done six months ago and appraisals that are done today are going to vary in the value of the property. But basically we have, in fact, talked with these owners, and we have negotiated with them fairly.
You know, you probably are aware that eminent domain is another method of a public agency acquiring land. We made the decision that we would prefer not to, in any way, go with eminent domain; we wanted to acquire these properties and pay fair-market value to the sellers. We wanted to work with them and make it a positive, win-win situation for both. And we've been very fortunate because at this point in time, as I just shared with you, all but one parcel is remaining, and that, we feel, will hopefully go into escrow by next week.
So we will have it then, and we will be ready to go forward. We are excited about that.
Signal: Have you used eminent domain in this process?
Gillis: No. not at this point.
Signal: Was it during the Aug. 10 closed-session meeting that you decided to purchase the property for $6.25 million?
MacGregor: No. no.
Signal: When was that decision made?
MacGregor: Basically we give direction on all of the parcels so far that we've had, we've given directions to our negotiators, what our parameters were. "We" meaning the board of trustees.
Those meetings are in closed session; it's one of the few provisions, as you know, that is covered by the Brown Act. Meaning, property negotiations, personnel, and contract negotiations, basically, as it deals with employee contracts and unions, are the only items that can be discussed in closed session. And obviously that's to protect the taxpayer, to protect the district, for not having that information get out as far as the strategy of purchase and the offers.
But basically, we go back on these parcels, and we've done this on every single parcel so far that we've closed escrow we gave those parameters to our negotiators far in advance. In this case, we gave the parameters for that purchase on July 6.
It's so unfortunate because Mr. Gillis missed that meeting, and so therefore he was not part of that closed-session meeting where those parameters were given to our negotiators. And that parameter was the upper limit of how high we would go for that parcel at that point in time, based on a certified appraisal that we had obtained which was actually higher than what we're getting the property for. So we're pleased on that. And much lower than what the property was listed at.
Gillis: I'd like to clarify something. She mentioned the July 6 meeting; we actually had a meeting on July 13 where we also gave parameters. This is after the July 6 meeting. And at that meeting, we had the higher appraisal, and we well, actually the higher appraisal was $6.452 million, and we questioned whether that was accurate. Actually at the July 6 meeting it was questioned whether that was too high. So we asked for a review of that appraisal.
At the July 13 meeting we authorized our negotiator to go to $6.25 million if a review of appraisal came back and said that that appraisal was accurate. Those were the guidelines that we had given our negotiator on the 13th of July.
MacGregor: It's unfortunate that's not correct. And of course the entire board, and all of the administrators, superintendent and staff, who have been involved in these closed-session meetings, do not have the same recounting of the meetings that Mr. Gillis has.
But of course, Mr. Gillis isn't sharing his ulterior motive for this, which is of course very political. And that's very unfortunate. Because it's the first time I've ever experienced that, coming into a situation.
But getting back to the issue here, which is the purchase price. This property was listed on the multiples for $8.5 million. They had an appraisal done that was at $8 million, meaning the seller. We had an appraisal, as Mr. Gillis just indicated; we are now purchasing the property, and it has now closed escrow, so we have purchased the property at $6.2 million.
We saved money on this transaction. We didn't spend money on this transaction, as Mr. Gillis has indicated, over the amount that we should have. We've been protecting the taxpayers' dollars on these transactions. We're under budget.
Gillis: I'd like to point out that at the time we paid $6.25 million for the property, the property owner was offering it at that price. The $8.5 million amounts come up once in a while, but the owner was offering it as a matter of fact, the day before the purchase, it was offered at that price.
And my problem with it was that our review of appraisal that came back, came back at $5 million, and the board actually did not have that information when they were called up to make the decision to purchase the property. That's where I had I had a problem with the procedures and the way they went about purchasing the property.
I think that a reasonable person, or a reasonable board, that had a review of appraisal that said it was worth $5 million and an appraisal that said $6.425 million would make a counter-offer somewhere between $5 million and $6.452 million.
MacGregor: I have to just correct all of this. First of all, here's an MLS (Multiple Listing Service) printout from July 5 that has it at $8.5 million. So, unfortunately, Mr. Gillis is incorrect again with his statistics and his point.
But the point of it is, we had a meeting on July 6. Mr. Gillis missed that meeting; that's where we gave the direction to offer this amount of money. And basically, unfortunately, he is bringing not an appraisal, not a valid critique of an appraisal; basically that figure was offered.
And I should explain this. Five million was offered. The sellers turned that down. We offered $5 million twice that was turned down, and they told us they won't entertain any offer less than $6 million. And the reason for that is because they already had a valid offer from a developer who was going to build homes up in that area, adjoining the homes in Sunset Heights that are already there.
And so, when that agent came back and said: My seller will not in fact entertain any offers that are less than $6.2 million I don't understand why Mr. Gillis would say we would offer less than that at that point in time, especially when we had an appraisal (for) more than that.
Gillis: I'd like to point out that at the July 13 meeting that I referred to, this piece of property was on the agenda for discussion in closed session, and was discussed in closed session. And it seems like the board wants to totally disregard what we said during that session. So I had real problems.
I didn't the previous pieces of property, we gave the parameters to our negotiators and they purchased them within those parameters, and I had no problem with that. This is the only piece of property that I've had a problem with the way they handled it.
Now, the parameters that were given on July 13, that if their review of appraisal came back and said the appraisal was accurate, then we would bid $6.25 million I agreed with that. But that's not what the review of appraisal said. So at that point
MacGregor: I'd like to talk about a couple things
Signal: Hold up. A housing developer had offered $6.25 million to the property owner for that property. You had an appraisal done. It came in at $6.45 million. Scott Voltz, whom you (Joan) have known for a long time
MacGregor: I have, for years.
Signal: looked at that appraisal, determined that the appraisal was based on an entitled land price, and also that some of the comps were bad. His opinion of the $6.425 appraisal was that for those reasons, it should be discounted to $5 million. What happened then?
MacGregor: You know, first of all, obviously you're discussing a piece of confidential information that has been released to you by Mr. Gillis, and that's unfortunate. Because that's something I can't discuss, that particular review. It was not part of the disclosed items.
But I'll go beyond that, because Mr. Gillis has indicated a lot of things here that just (are) simply not true.
First of all, the direction was given (at) the July 6 meeting, not after that period of time. And I was the one who requested because I was concerned enough about the value that we were paying, and the taxpayers' concern Mr. Gillis knows this that I asked for another meeting, and another evaluation with Mr. Patterson, Rick Patterson, who we went to. Staff set up the meeting, two of us went to it, all board members knew about it. (We) went to that meeting and talked with him about value. Actually, he feels we're getting a deal. And we are. And we really are.
But as far as the appraisal, you have to understand that we're a public agency. And if, in fact, it had gone to eminent domain, you realize of course we'd being paying not only where we were; we'd be paying over the $8 million. Meaning, they take the highest appraisal, which was at $8 million at that point, and of course then the cost of eminent domain, $300,000 to $400,000, in order to complete that process.
So we are saving the taxpayers a great deal of money on this transaction. And it's unfortunate Mr. Gillis who had released this information to a candidate running for the board, who (Gillis') wife is the campaign manager for unfortunately, because he did that, he had to, in open session, release his confidential information.
He has admitted to doing that, and felt and that's very unfortunate. It's the first time in 32 years (as) a trustee in this valley that I've ever, ever had politics enter into a decision-making process of a board. And I've served on numerous boards, as you know.
Gillis: I'd like to dispute the fact that I admitted that I released confidential information. I'd like to do we have time that I could read
Signal: We could give it a shot.
Gillis: I'd like to read the section from the (board meeting) transcript where they say that I released confidential information that might compromise or prejudice the purchase of the property. OK:
"I am opposing the resolution to purchase the property mainly because there is information that the administration received, actually a review of appraisal at a substantially lowered amount. The value for the property and the difference between the appraisal and the review of appraisal was $1.452 million. So at that point I think that that information should have been given to the board of trustees so that we could make a knowledgeable and informed decision. And normally in a situation like that, when you find out that a person appraises a piece of property at a lot less than another person appraises it, you take that into consideration when you make that offer or counter-offer. And I'm opposing it because that information should have been given to the board of trustees prior to the time we did receive it. And it should have been given to us by the administration rather than another trustee."
Now, I would challenge anybody in the world to tell me what the appraisal was or what the review of appraisal was, based on what I said here. I would challenge them to and I did tell Jonathan Kraut that I thought, you know, that there was a discrepancy of $1 million to $1.5 million. He had no other details than what I said here in the open session, and I defy anybody to tell me any details about this procedure based on what I said.
MacGregor: I know that this is obviously, Mr. Gillis has to read all of this, but I'd like to share with you that Mr. Gillis was called, and would have been given this verbal information. But he never returned the call. They have a record in the office of them calling Mr. Gillis, but as usual, he does not return his calls. He misses meetings; he's not active at the board. It's very discouraging to have a trustee, like this, try to jeopardize such a wonderful, wonderful center that's going to benefit the students of Canyon Country.
And Mr. Gillis is wrong. I have been the most conservative person on the board, as far as watching for the taxpayer dollars. And I have done that for years. I'm the "budget person," as they refer to (me). And I really, really resent his idea of trying to ride in on his white horse and act like he's saving. He's not saving. He was covering himself politically because he had made a major blunder. He had released information, both in open session and to a candidate running for office. What a shame.
Signal: In your opinion, is what Mr. Gillis quoted out of the minutes an accurate reflection of what he said in the meeting?
MacGregor: What he said in the meeting yes, it's correct.
Signal: He mentioned a $1.452 million figure; he mentioned the existence of two different appraisals
MacGregor: There were not two different appraisals, so let's be careful there. There was only one certified
Signal: Those were his words ("You find out that a person appraises a piece of property at a lot less than another person appraises it").
MacGregor: I know, and in that case, he's wrong.
Gillis: There was an appraisal and an review of appraisal.
Signal: The question is, what is the "confidential information" that he disclosed, in violation of the Brown Act?
MacGregor: At that point in time we were still until a property closes escrow, it is still it is not our property. And any parameters, as you may have well, you weren't at the meeting last night, our college board meeting, but we are still in negotiations with our last parcel. So we're not divulging what our appraisals are, and where we are, and some of that information.
The point is, he released this. We were still, in effect, had the ability to have that seller come and cancel that escrow. It was of great concern to the board. It was something that shouldn't have been done. And again, he did it because he wanted to cover himself. But I want to go into a couple of other points.
This is the second-lowest price per acre of all the parcels that we have purchased. So we are not paying a much higher price for this particular property than we have paid on a pro-rated basis for all of the others. And Mr. Gillis voted yes for all of the others
Gillis: Yes, I did.
MacGregor: This is the only one that he didn't. But you see, Mr. Gillis missed the meeting. And that's what's so hard. He never bothered to call and find out what went on at that meeting, so
Signal: You already made that point.
MacGregor: Again, the point is, Mr. Gillis is incorrect; the rest of the board of trustees feel that he should have been part of this, he should have been supportive of this, and unfortunately he got into a political mess. And so he's now covering himself.
Signal: You have said, Joan, that you did not have a concern that the seller of this most recent property would raise his price based on the knowledge of your purchase of the other parcels. Did
MacGregor: I don't remember saying that, but go ahead.
Signal: Did Ron Gillis, by discussing on Aug. 10 how did his disclosure of that information jeopardize the college?
MacGregor: We think it's increased the value of this last parcel, and that's tragic.
Signal: The one that hasn't closed yet.
MacGregor: (Yes. The one) that we haven't completed the negotiations yet on.
Signal: Let's wrap up.
Gillis: I'd like to point out again that this was discussed on July 13, not just on July 6, and I'd like to point out that yes, this has been politicized. There was no violation of the Brown Act in what I said in open session.
I had a real problem with the way they purchased this one piece of property. I don't think that they did it correctly. I think they might have been in violation of the Brown Act for a serial meeting when they made the phone calls.
Now, in none of the other pieces of property did they call all the board of trustees on the day that they purchased it. They called to get permission to purchase the property because under the parameters they had, they couldn't do it. Because the parameter was that the review of appraisal would have to justify say that the appraisal was accurate. So they had to call and basically change the parameter; that the review of appraisal came in below, and they still wanted to purchase it at the same price.
So I think this has been politicized, but it wasn't I that politicized it. I made this comment in open session. This was not a violation. If this were a violation, I'll tell you, this board would have given it to the district attorney. It wouldn't have been censure.
Signal: Joan, did the board violate the Brown Act by authorizing an offer for property over the telephone?
MacGregor: Definitely not. You know, Mr. Gillis has repeated and repeated and repeated this statement. But the more you say it, doesn't make it true. It's not true. There was never any vote by phone.
Basically these directions and parameters were given (at) the July 6 meeting. Mr. Gillis was not present, so it's interesting how he keeps saying he knows all about it. He doesn't know about it. He wasn't there.
Now, second of all, as far as the vote, it was unanimous at that meeting, meaning all of us gave that direction to our negotiators: Go forward with the price that we have now entered into escrow and closed escrow with on this parcel.
Now, as far as the phone call that he's referring to as some kind of vote, there was no vote on that. And basically all that was, is giving information, as the staff has done repeatedly, to all trustees. No one can ever reach Mr. Gillis to give him his information. But on the other parcels, I've had a call every time, telling me the status of that.
So unfortunately, that is not the case. We have been getting that information. It's been updated to us, to let us know what is happening. That's not a serial vote. There was no vote. We had already given the direction on July 6.
So, unfortunately, Mr. Gillis again is wrong. And it's unfortunate, because he is the only one on the board that has taken this position, that everyone all the other trustees, the superintendent-president, everyone.
And if I could add one more thing, since Mr. Gillis did talk a little longer, is that we rely on our attorneys. And our attorneys are telling us, this definitely was a violation of the Brown Act (by Gillis). In fact they wanted us to go to litigation and they wanted us to file an investigation with the DA. Our board said: Censure is enough at this time; we hope Mr. Gillis will learn his lesson.
Signal: (To MacGregor): Are you contemplating litigation?
MacGregor: You know, at this point, we may.
Signal: (To Gillis): Are you contemplating litigation?
See this interview in its entirety today at 8:30 a.m., and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.