Price for former boys school is too steep for Paso — but it still has a shot at the property

The city of Paso Robles says it is no longer in private talks with the state of California to purchase the shuttered El Paso de Robles youth correctional facility, but buying the site on the public market could yield a far better deal.

The city has been seriously exploring buying the vacant facility for more than a year in the hopes of repurposing it for such possible uses as homeless transitional and farmworker housing, educational and sports facilities, commercial developments, mental health services, or an ethanol plant or solar power installation.

But citing the state’s costly demands under a direct deal, the city has dropped out of negotiations for now with the intent to make an offer after the site goes up for public sale the first week of January, City Manager Tom Frutchey said by phone Friday.

“We are definitely still interested in the site, but we’re not developers and we’re not interested in going it alone,” Frutchey said.

The city of Paso Robles had been designated as the preferred local agency to buy the former boys school after other state agencies declined. But acquiring it under that process placed onerous requirements on the city, which is only interested if the property eventually irons out to be cost-neutral.

Paso Robles leaders will consider buying the vacant 160-acre El Paso de Robles Youth Correctional Facility from the state for $4.7 million to $4.8 million. The city is considering various uses for the property, which has been vacant since 2008, including a homeless services site or a Salvation Army center. Joe Johnston jjohnston@thetribunenews.com

Frutchey said the private sale process required that the city only lease to nonprofits, meaning little to no income, and not resell the property for 25 years.

Moreover, purchasing the site under the preferred agency process meant the $4.8 million price tag was firm. It’s the city’s position that that amount — which does not include demolition, cleanup, and other maintenance costs — is too high for Paso Robles, Frutchey said.

“We’re at a huge financial risk if we can’t recoup those costs,” Frutchey said.

But in the public market, those restrictions don’t apply.

Frutchey said that there will be a roughly four- to five-month due dilligence period after the state posts the property for sale, and bids will likely begin to be accepted in or about June.

The state facility, located near the corner of Airport and Dry Creek roads, has remained vacant since 2008.

It formerly housed juvenile offenders on and off beginning in 1947, but the the facility was eventually closed due to budget cuts, a declining inmate population, and correctional policy changes.

The state spends $400,000 per year on maintenance costs, according to the California Department of General Services, and has appraised the value at between $4.7 million and $4.8 million.

Various plans to repurpose the 160-acre site, 23 acres of which house a Cal Fire substation, have been floated throughout the past 10 years.

Mayor Steve Martin told The Tribune in 2017 he hoped the state would allow the city to buy the facility for a reduced price because it would be used in a way that would benefit the public, such as homeless services or farmworker housing.

The city — which recently declared a homeless shelter crisis — is also considering applying for and using state Homeless Emergency Aid Program (HEAP) funds to help purchase the youth facility, Frutchey said. The Salvation Army has also expressed interest in part of the property, should the city continue to pursue it.

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Matt Fountain is The San Luis Obispo Tribune’s courts and investigations reporter. A San Diego native, Fountain graduated from Cal Poly’s journalism department in 2009 and cut his teeth at the San Luis Obispo New Times before joining The Tribune as a crime and breaking news reporter in 2014.
Lindsey Holden writes about housing, North County communities and everything in between for The Tribune in San Luis Obispo. She became a staff writer in 2016 after working for the Rockford Register Star in Illinois. Lindsey is a native Californian raised in the Midwest and earned degrees from DePaul and Northwestern universities.