Girls Inc. of Greater Santa Barbara files lawsuit over real estate bait and switch

Greater Santa Barbara’s Girls Inc. fell victim to a real estate sting, a new lawsuit alleges. In the lawsuit, the developer promised to purchase the nonprofit Ortega Street property and lease it back to Girls Inc. Flipped it over to another buyer, who kicked the organization out.

“This is difficult for us,” Girls Inc. CEO Jen Faust said of the lawsuit after negotiations between the parties fell through. “But at this point, we feel that’s the best way to protect our rights.” I am looking for

Robert Forouzande, an attorney representing developer Presidio Capital Partners, said the lawsuit was “totally baseless” and “baseless.” The purchaser, Providence School, also said the complaint was unfounded. “[W]We are vigorously defending the lawsuit as we are taking all appropriate legal steps to protect the school,” said Principal Soo Chang.

The story begins in July 2021. Seeking to tackle pandemic-related revenue losses and reduce overhead costs, Girls Inc. sells Eastside property it occupied for 65 years and uses proceeds to develop new and more agile service delivery methods. ​​decided to support. Contribute to the community through onsite partnerships with schools, community centers, and other youth programs. The non-profit organization decided to seek out a buyer who would allow Girls Inc. to stay at the facility for at least one year and up to two and a half years.

The property went public in September and by October Girls Inc. had received a $7.75 million offer from Providence. Providence is a private Christian school that was planning to build a new campus for middle and high school students. However, Girls Inc. turned down the offer after learning that Providence could not comply with the extended leaseback requirements, the lawsuit states.

Shortly thereafter, Girls Inc. received a second offer. This time it was her $7.5 million offer from Presidio Capital Partners. But unlike Providence, complaints have continued, and Presidio said it would be willing to give Girls Inc. the time it needed to relocate and reorganize the site. Based on that statement, Girls Inc. said in numerous emails and conversations made multiple times to multiple board members, the nonprofit agreed to sell to her Presidio. . Escrow closed on February 11, 2022.

Just five days later, the Presidio was sold to Providence for $8 million in an all-cash transaction for a quick $500,000 profit, according to the lawsuit. Negotiations between Presidio and Providence appeared to have been going on throughout the escrow period, and Girls Inc. was deliberately kept secret, the lawsuit says. “Girls Inc. was stunned to learn that the trust and confidence they had placed in the Presidio had been broken,” the complaint reads. “In addition to the Presidio’s broken promises, Providence decided to sidestep Girls, Inc., knowing why they did not decide to accept the offer.”

On April 8, Providence gave Girls Inc. 90 days to vacate the property. According to Faust, the quick and unexpected notice threw the organization into chaos. The program had to be closed abruptly and the curriculum changed, she explained, clients and their families caught off guard by the news. It’s a useful and important service,” she said. Faust said her 50 staff members at the nonprofit were also stymied.

Faust went on to note that the East Side organization serves more than 1,200 Santa Barbara County residents each year. He said, “Resources that are meant to help girls and teens are diverted to this truly unfortunate situation. It’s not only disappointing for us, it’s heartbreaking.”

The case is being heard by Judge Colleen Stern. The next trial is scheduled for October 10.

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