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Academy Of Art Agrees To $60M Settlement With San Francisco

SAN FRANCISCO (CBS SF/AP) — The Academy of Art University in San Francisco has agreed to a $60 million settlement aimed at bringing the school's many illegally converted buildings into compliance with local rules, officials said Monday.

The deal ends a city battle with one of the nation's largest for-profit art schools and one of San Francisco's biggest landlords.

City Attorney Dennis Herrera said the Academy of Art risked asking for forgiveness instead of first asking for permission.


"This was a case where the academy, a privately held for profit company, amassed a real estate empire while thumbing its nose for a decade at planning and building department code requirements. These are requirements that every other San Francisco property owner must follow," said City Attorney Dennis Herrera.

Herrera said the settlement would be by far the largest award the city has ever secured.

The agreement took months to reach and the legal fight has spanned across a decade.

The Academy of Art University will pay $20 million in fines and fees. This deal will also require the academy to provide at least 160 units of affordable housing valued at an additional $40 million.

It will be 18 months before the units are converted from illegally set up dorm rooms to apartment units people can live in.

"This was housing that San Franciscans desperately needed in the midst of an affordable housing crisis," said Herrera. "Now through our efforts, this company has finally agreed to be a part of the solution rather than a major contributor to the problem."

The city sued the academy in May, claiming at least 33 of the school's 40 buildings throughout the city were out of compliance with zoning codes, signage laws or historic preservation rules.

Less than an hour later, the academy's lawyers held a press conference of their own.

They said they're pleased with this agreement, but maintained they believe there was one major detail getting lost in the settlement: the fact that the academy applied for proper use changes for its buildings back in 2007. Attorney Jim Brosnahan said he believes the academy has been demonized for 9 years.

"The academy has resolved its outstanding issues in a way that makes it, again, a very good neighbor in this community," said Brosnahan. I think one thing that I learned is how desperate the situation of affordable housing is in the city of San Francisco."

The academy is the largest private accredited art and design university in the nation with 8,700 students and 2,000 working artists and staff employed in the city. Three buildings will be closed now, but 33 will be authorized.

TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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