Crony Capitalism is Alive and Well in Escondido

The city council majority approval of item 10: Extension of Lease Term with American Heritage Charter Schools at 2285 and 2269 East Valley Parkway, at their February 14, 2018 meeting, was a sweet Valentine’s Day present to their old buddy Dennis Snyder and his Heritage Charter Schools. For many Escondido citizens, this is a heartache rather than a Valentine.

Where the Heritage Digital Academy is now, there once was a branch of the Escondido Public Library. The City Council voted to close that branch when they approved the city’s budget in June of 2011.  Mel Takahara beautifully summed up why that was not a good decision: . The full study by Escondido’s Future and CSUSM can be read at: .

The vacated library branch was first leased to Heritage Charter School two years later in June 9, 2013. That was another turbulent city council meeting, as described by David Garrick: . That was the first time I accused the council majority of crony capitalism. As Garrick noted, Councilman Ed Gallo was offended, saying he didn’t sell his soul for political contributions. The lease at that time was for ten years, expiring in May, 2023.

Gallo also bragged that Heritage was the best school in California. If that was ever true, it doesn’t seem to be the case now, based on anything I find. But, there’s no doubt that Snyder, his school, and the Heritage Foundation do everything they can to promote conservative propaganda in a way to please conservatives like Gallo, as Rebecca Nutile itemized in her excellent article: .

On December 9, 2015, the City Council Majority voted to extend the Heritage lease until December of 2030. At the same time the council majority agreed to lease the property that had been leased to the Escondido Community Child Development Center at the 2269 address to Heritage, also until December of 2030. The stated reason for such a long lease at that time was: “because Chater intends to use the same lender that funded the improvements at Heritage Digital Academy…”  See:  In other words, they needed to have a longer lease to obtain a loan. And in 2016, they were able to obtain backing for another bond issue with a thirty year yield—until 2046.

So it’s not surprising that Heritage now wanted to extend its lease until 2046, to satisfy its bond purchasers. And Snyder’s cronies on the Escondido City Council obliged.

At the Valentine’s Day meeting, Paul McNamara objected to the extended lease. Why extend any lease that long, he asked. Why commit to a rental increase of only three percent a year? Why was there no consideration of returning that space to a city library? How can the council possibly anticipate the financial modes of the next 25 years?

Councilwoman Olga Diaz agreed. Such an extension was unnecessary, and eliminated the possibility of returning the property to a library facility

Councilman Mike Morasco, explained that the obvious reason for the extension was to extend the lease for the length of the bond. He went on to say that there was still public use of the facility, that the space can be leased, that the computer center was available on a sign-up basis, and that the school had made tons of improvements to the building and had enhanced the entire area.

Gallo reminisced that the building had first been a Big Bear Market attached to a strip mall, and that the city had purchased the property and put in a gym, which was still open to the public. (Well that’s true, the gym is available to the public for about 20 hours a week.) But, of course, the city also remodeled the building to accommodate a library branch that served east Escondido residents. He also opined that it was not uncommon for the lease to correspond with the bond.

Mayor Sam Abed said that opponent’s problem with the lease with was with the charter school. He asked staff if this lease were any different from any other lease with the city—he was assured that it was market rate. Well market rate less a $2,600 per month credit for tenant improvements. This will add $6.6 million to the general fund. (Well, over the next 28 years.)

The lease amendment was passed four to one—Diaz voting no. After the vote, Dennis Snyder got up to leave, Ed Gallo waved at him—as if to say here’s to you, Coach. The crony-capitalist good ole boy society is alive and well in Escondido.


One thought on “Crony Capitalism is Alive and Well in Escondido

  1. petedietz34

    Yes, and what the only council member who speaks out against this cronyism has to put up with from some of the other council members is disrespectful and inexcusable. When a council member directed his response, “I guess ignorance is bliss,” to Ms Diaz after her comments regarding extending the lease, I was shocked, and I am no less shocked at the condescending tone the mayor of our city uses to speak to Ms Diaz as well as anyone who doesn’t agree with him.



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