On October 7, 2021 The Winston School filed a lawsuit against the City of Del Mar in the San Diego Superior Court, seeking declaratory relief, contending that Del Mar breached the covenant of good faith and fair dealing, and seeking reformation of Winston’s lease. The City’s initial response is due in early November.
Winston opened its school in Del Mar in 1988, originally as a tenant of the Del Mar Union School District (DMUSD). In 2007 the City bought the Shores Property from DMUSD for park purposes, including the Winston site, and negotiated a long-term lease with Winston, from 2008 to 2063. The lease included obligations on the part of Winston to scrape and rebuild the site, or undertake a major remodel, with milestones and deadlines spelled out in the lease.
In 2018, as the first milestone approached, which was to submit a complete redevelopment application by Dec. 31, 2019, Winston asked for major revisions in its lease, including a reduction in annual rent to $1 from $197,245. (That amount was the rent it had been paying DMUSD, and remained the same under the new lease with the city. Winston received prepaid rent credit for funds it raised for the City’s purchase of Shores; those rent credits have covered all of its rent payments to the City to date.) Winston also asked for a doubling of the lease term. Several years of negotiations and milestone time extensions ensued, but an agreement was never reached, and on October 2, 2020 the city issued a notice of default under the lease for Winston’s failure to meet its first milestone.
The notice of default triggered a ninety-day period under the lease for Winston to “cure” the default. That ninety days was extended by the city on several occasions to give Winston more time. Finally, on August 11, 2021, the city council voted unanimously (Druker recused) that Winston had failed to cure the defaults, and that its lease rights, per the lease, had ended and it would have to vacate the property by July 2023. The major issues with the redevelopment application, as expressed by the City, appear to be bringing all of Winston’s buildings up to current code, and meeting Code parking requirements. The Winston lawsuit followed.
Interestingly, a central tenet of the lawsuit is the contention that the city terminated the Winston lease with an ulterior motive to convert the property to affordable housing. However, the city has previously taken the Shores property off the list for potential affordable housing. It is unfortunate that a unique institution with widespread community support cannot reach an agreement with the city and that they now assert a false premise in their lawsuit. Other more substantive issues raised by Winston include the financial impact of the pandemic and neighborhood opposition to a new campus with larger buildings and more students.
The Sandpiper will follow this case as it develops.