Academy of Art agrees to $60 million settlement of SF lawsuit
After a decade of thumbing its nose at San Francisco’s zoning laws, the Academy of Art University has agreed to a $60 million settlement with the city aimed at bringing the school’s many illegally converted buildings into compliance with local rules. The deal caps a highly charged battle with one of the nation’s largest for-profit art schools, an institution that is also one of the city’s biggest landlords — a fight that culminated in May when City Attorney Dennis Herrera sued the academy. The city’s lawsuit said that at least 33 of the academy’s 40 buildings throughout the city — including its campus headquarters on New Montgomery Street — were out of compliance with zoning codes, signage laws or historic preservation rules. [...] Herrera said, the school had taken 160 units of affordable residential units off the market and illegally turned them into student housing. Academy of Art President Elisa Stephens said in a statement, “We are very pleased to reach this agreement, which allows the academy to make significant contributions to San Francisco while maintaining our academic excellence and providing for our students.” Pay the city $20 million in fines and fees over five years — $7 million of which would go into a city fund to buy rent-controlled apartment buildings and maintain them as low-cost housing. Provide and maintain at least 160 units of low-income housing for senior citizens on two adjacent sites that the academy owns on Nob Hill near Chinatown. On a different front, the academy will also work to keep its fleet of buses off of the city’s main traffic arteries and provide students and staff with free Muni passes. The settlement follows months of negotiations between the city attorney and the academy’s legal team at Morrison & Foerster, led by senior counsel James Brosnahan. Herrera’s lawsuit said the academy’s building conversions unlawfully deprived San Francisco of housing, skirted neighborhood planning rules and disadvantaged competitors in the real estate marketplace. Since its founding in 1929, the academy has become the nation’s largest private, regionally accredited art and design school.