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SF reaches $60M settlement with Academy of Art University

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The Academy of Art University is one of San Francisco’s largest property owners and landlords. (Ekevara Kitpowsong/Special to S.F. Examiner)

San Francisco has reached a record-breaking $60 million settlement with the Academy of Art University, one of The City’s largest property owners and landlords, which was accused of flouting building and planning code laws for years.

The terms for the proposed settlement between the City Attorney’s Office and university include $20 million paid in penalties and for a project to help low-income tenants at risk for evictions — the largest monetary award for The City in a code enforcement case.

SEE RELATED: SF leaders paint Academy of Art as ‘land-use scofflaw’ in new lawsuit

Also included in the deal are for the university to provide at least 160 units of affordable housing that’s worth another $40 million, which city officials said is an unprecedented amount for a code enforcement case in San Francisco. The first half of the units of affordable housing must be ready for occupancy within 18 months, according to the deal.

The proposed settlement would bring the university and its various companies that own property throughout The City into compliance with land-use laws as well as secure new affordable housing and other benefits for San Francisco, according to the City Attorney’s Office, and comes after a lawsuit filed May 6 claimed the university was operating only a handful of its some 40 buildings legally.

In fact, City Attorney Dennis Herrera called the univeristy an “egregious land-use scofflaw” when he announced the lawsuit last summer.

On Monday, when announcing the settlement, Herrera said the deal would ensure the university helps ease the housing crisis it purportedly helped exacerbate by taking so many homes off the market. City officials said the university acquired residential and commercial properties that were converted to student dorms and facilities, depriving The City of hundreds of much-needed homes.

“Our focus here was not just to have Academy of Art University follow the law, it was also to have this company provide tangible benefits to everyday San Franciscans to help address its role in exacerbating our housing crisis,” Herrera said said in a statement Monday. “This deal would do that.”

The agreement also includes continued court oversight of the university.

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