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City looks for $60 million in Academy of Arts Settlement

San Francisco City Attorney Dennis Herrera announced in late December an agreement on a proposed settlement of the city’s suit against Academy of Art University that would settle a raft of claims and complaints against the for-profit school and end a multiyear battle. Herrerra values the impact of the settlement at $60 million to the city in cash and benefits.

The deal includes $20 million in cash, the largest monetary award the city has received in a code enforcement. The money includes penalties for multiple code violations at the school’s many properties in the city, as well as a contribution to a city program for low-income tenants at risk of eviction. The Academy of Art would also be required to provide at least 160 units of affordable housing for 66 years at no cost to the city; that replaces the 160 units of affordable housing that Herrera’s office says the Academy illegally converted into student housing.
“Academy of Art University and its real estate affiliates behaved for more than a decade like they were above the law,” Herrera said. “We’ve ensured those days are over. After years of meeting our good faith with bad faith, the academy has finally agreed to do right by the people of San Francisco. I look forward to the academy taking this new path, one where they follow the rules and are a positive influence in their hometown. This day has been a long time in the making. Our work here sends a clear message: No matter how wealthy or politically connected you may be, the same rules apply to everyone.”

The proposed settlement includes a number of other elements ranging from a mass transit program for the school’s students to limiting the students’ impact on local housing inventory.

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