Winston Lawsuit Settles with Agreement on Revised Lease Terms

On September 29, the City posted what it termed as a “City of Del Mar/Winston School – Joint Public Statement,” announcing a settlement in the lawsuit currently pending between Winston and the City. The Winston School released its own statement the same day. Previously, the City had terminated Winston’s lease, asserting that Winston had violated the lease, including failing to comply with development milestones for a major remodel of the school’s buildings. 

The “Joint Public Statement” released by the City reported that “after many months of settlement negotiations, the parties have reached agreement on updated lease terms and a settlement agreement that will allow for the dismissal of the pending lawsuit, major redevelopment of the Winston school buildings, and continued operation of The Winston School for the foreseeable future.”  Winston’s statement quoted Board President Laura Cunitz as stating “Winston is pleased to have the lawsuit behind us. We feel we have developed a strong working relationship with City staff and are very much looking forward to redeveloping our 1947 campus to meet the needs of today’s students.”

City Manager Ashley Jones responded to an inquiry from the Sandpiper with details about key lease provisions that reflected in the First Amendment to the lease (see summary below). Most immediately, Winston is to submit its development application for a major remodel of Winston’s building by October 31, 2023. 

Key Provisions of First Amendment to the Lease

• Establishes a clear scope of work for the Winston School’s redevelopment project, and authorizes the City Manager to sign the School’s development application, which is to be submitted to the City on or before October 31, 2023.

• Provides formal public access to 18 exclusive School parking spaces during non-school hours, with the City ensuring the same number of non-exclusive spaces are available to Winston for use during school hours and after-hours school activities/events, such as Back to School Night and graduation, with prior notice and coordination with City.

• Modifies the Development Milestones under the Lease to begin on October 31, 2023, and reach 100% completion on or before December 31, 2031.  The original Lease did not include a 100% completion milestone.

• Modifies the Lease, with respect to lease payment adjustments, from a variable rate annual adjustment based on CPI (Consumer Price Index) to a fixed rate of 2.5% annually starting on July 1, 2024, and every July 1 thereafter for the term of the Lease. The total lease payments over the term of the Lease (55 years, from July 1, 2008 to June 30, 2063) will total $17,575,776 ($14,365,333 after application of Winston’s initial rent credit related to funds raised to help purchase Shores Park).  The first annual rent payment, following application of Winston’s rent credit and one-year rent abatement related to litigation mediation/settlement negotiations, will occur on July 1, 2024, in the amount of $221,674.

• Reduces Winston’s leasehold area by 15.8%, which includes future lowering/relocation of the eastern portion of the School’s iron perimeter fencing adjacent to Shores Park to improve sight lines from the athletic field.

• In conjunction with the Settlement Agreement, the First Amendment requires dismissal of the lawsuit within ten (days) of execution by the Parties.