The Poway Unified School District announced Wednesday it will not be moving forward with a proposed lease of district-owned land to Costco. 

School officials said in a news release that the two parties “have mutually agreed to end all negotiations.” The district will continue to gather public comment before presenting board members with new recommendations about the undeveloped property. 

Why this matters

Poway Unified School District, the third largest in San Diego County, serves more than 36,000 students. The district is suffering from a long-standing deficit and is looking to offload real estate for additional revenue. The public is required by law to be informed of the process.

The decision is a win for residents who were suing the district in an effort to stop the big-box retailer from building a new location on the 27-acre lot.

inewsource reported last month that Protect Our Community Now, a nonprofit formed in opposition to the project, alleged school officials violated the state’s open meeting law during its negotiations. The group also commissioned an outside analysis that found Costco’s proposal undervalued the land.

Protect Our Community Now said on its Facebook page that the decision was a “start for us as we get PUSD to work with the community.” The group filed court documents last week accusing the district of violating the California Environmental Quality Act, a claim that Poway Unified has previously disputed.

The Costco proposal was one of three the district received to develop its Black Mountain Ranch site. The retailer offered nearly $106 million for the property over a 40-year lease. A nearby private school offered $22 million and a residential developer offered $47 million to buy the land outright.

Poway Unified School District had proposed leasing this 27-acre lot at the corner of Camino Del Sur and Carmel Valley Road to Costco, Feb. 3, 2021. (Zoë Meyers/inewsource)

Once meant for a middle school, the land was deemed surplus property more than eight years ago, meaning it was no longer needed. Aside from equipment and a staging area used by San Diego Gas & Electric, the lot is largely vacant. It’s surrounded by homes, churches and a wildlife corridor.

The district had viewed Costco’s proposal as the best option: A school official previously told inewsource that money generated from a lease is subject to fewer restrictions, which would help them combat a nearly $33 million deficit within the next two years.

A district spokesperson said Wednesday that officials are still exploring ways to leverage the property for additional revenue.

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Costco had planned a 153,000-square-foot warehouse and 32-pump gas station at the location, along with space for other standalone businesses.

The district will hold a virtual meeting on March 18 to discuss community ideas for the property.

Type of Content

News: Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.

Jennifer Bowman is an investigative reporter at inewsource, covering Imperial County and the South Bay. She used to cover education for inewsource. She’s happy to be back in her hometown after stints at daily newspapers in Michigan and North Carolina. At the Asheville Citizen Times,...