Morro Bay council votes to buy school site for $5.3 million — now real work begins
The Morro Bay City Council took a major step toward acquiring the former Morro Elementary School site this week, voting to purchase the property for $5.3 million.
But many details remain to be hammered out, the biggest of which will be developing a plan to fund the purchase.
On Tuesday, the City Council voted unanimously to approve a purchase agreement between the city and San Luis Coastal Unified School District for the 9.7-acre property.
After the vote, the room erupted in applause — with community members celebrating a path forward for the beloved school campus.
“I think the community is going to get everything that they want there: housing, preservation of the school,” Councilmember Bill Luffee said at the meeting. “It’s a legacy project.”
If the San Luis Coastal Unified School District approves the purchase agreement next week, the city will place an earnest deposit of $500,000 on the property from the city’s general fund, city manager John Craig said.
Then, the city would have until Oct. 31 to create a plan for paying the remaining $4.8 million. Options could include grants, a low-interest state loan, the city borrowing money from itself and more, Craig said.
City staff will present all viable funding options to the City Council for approval before moving forward with the purchase.
City Councilmember Jeff Eckles said he would like to balance fiscal responsibility while seizing a “once-in-a-generation opportunity.”
Councilmember Zara Landrum agreed, calling the project “a leap of faith.”
School district ready to sell Morro Elementary site
San Luis Coastal moved to sell the Morro Bay Elementary site as well as the Sunnyside school site in Los Osos last year to help manage the district’s ongoing structural budget deficit of at least $6 million. Morro Elementary shut down in 2001.
The city initially expressed interest in the property in January 2025 but ultimately did not move forward then, San Luis Coastal assistant superintendent of business services Ryan Pinkerton told The Tribune at the time.
But after residents of Morro Bay pushed back, concerned that the property would be sold and developed into housing, the City Council asked the district to hold off on the sale to give the community time to develop a plan.
Now, the city is moving ahead with that plan.
“The school board is excited to see the agreement move forward with the city of Morro Bay and hopeful that it will lead to a final sale to the city,” Pinkerton wrote in an email to The Tribune on Wednesday morning.
What’s next?
The San Luis Coastal Unified School District’s governing board will consider the purchase agreement on March 17.
Then, if the purchase agreement is executed, the city would enter into a due diligence period that ends on Aug. 31, Craig said.
During the due diligence period, the city would conduct an environmental review of the property, site and building code inspections, and testing for hazardous materials like asbestos and lead. It would also review water, sewer, stormwater, power and broadband connections and create cost and timing estimates for property improvements, among other steps.
The city will also explore potential uses of the property, such as city offices or housing.
Meanwhile, the city will host at least two community meetings, one in April and another during the summer. At these meetings, residents can share their vision for the property, which the city will integrate into project planning, Craig said.
Staff will release the due diligence report on Aug. 10, and the City Council will review it on Aug. 24, when they will ultimately decide whether to move forward with the purchase.
If the City Council votes to buy the property, escrow will close by Oct. 31.
In order to close escrow, the city must be able to hand over the rest of the $4.8 million, Craig said.
If tenants remain on the property, the school district would assign their interest in the lease to the city, which would decide what to do with the lease, city attorney Brian Stack said. The city is interested in continuing the existing leases, he said.
The Central Coast Montessori School is currently one of the tenants leasing space at the campus.
Morro Bay residents support purchase of school site
Friends of Morro Elementary board president D’Arcy Castro thanked the City Council for pushing the project forward.
“I look forward to hopefully saving this site to be there for community use,” she said.
Morro Bay resident Nicole Dorfman said she thinks the site can support all community needs that have been suggested for the property, from housing to a civic center.
“In my mind, it’s a win-win,” she said. “This property can handle all those things. It’s kind of like Christmas in March.”
She encouraged the City Council to move ahead with the project.
“It’s a tremendous opportunity, and if, for some reason, it doesn’t work out, you’ve got an almost 10-acre property with ocean views that can be sold,” she said. “So, in my mind, there’s no risk.”
Morro Bay resident Judy Setting agreed and encouraged the City Council to preserve the original building, sports fields and the Montessori school lease while also building senior housing.
“This property can be a balance of what the community’s vision is,” she said.
This story was originally published March 12, 2026 at 10:30 AM.
