SAN JOSE -- The downtown condominium that former county schools chief Charles Weis unloaded on the Santa Clara County Board of Education has been sold, recouping some but not all of the money that taxpayers put out for the luxury unit.
When all the costs and gains are calculated, the loan and Weis's abandonment of the condo cost the county school board at least $222,200.
The arrangement enraged employees of the County Office of Education and others in the community after they learned the lenient terms of the loan and that the county's former top educator had walked away from it.
The board had lent Weis $915,000, more than half at zero interest, to purchase and remodel the condo in 2008. But it didn't require him to make monthly payments of principal or interest; instead, the loan was due upon his leaving as county office superintendent.
In a different transaction, former Superintendent Xavier De La Torre repaid in full, with interest, the loan the board provided when he purchased his home in San Jose's Cambrian neighborhood. In about two years, the board earned $42,221 in interest on De La Torre's $960,000 loan.
Board President Leon Beauchman declined to comment. However, he issued a statement that the transactions were carried out "in an efficient and fiscally prudent manner. We remain committed to being good stewards of taxpayer funds and are pleased to be able to close the books on these properties."
Not all agreed on the board's view of itself. Don Renwick, former president of the County Office of Education teachers union, called the superintendents' loans "ridiculous."
"I still marvel at fact that they had legal counsel that entered into contract that didn't have any payments," he said. "The board needs to gain some intelligence somehow."
The law firm Lozano Smith, with an office in Monterey, advised the county school board in drawing up De La Torre's contract.
When Weis retired two years ago and walked away from his home and loan, the seven board members apparently had not been aware that their contract with him didn't require him to make monthly payments -- nor that Weis's successor, De La Torre, benefitted from the same deal. They hastily renegotiated that contract for De La Torre to make regular payments.
Weis's 18th-floor unit sold for $810,000 on June 12. That's less than the $890,000 Weis paid eight years ago for the condo in the Axis Building overlooking the Guadalupe River.
As housing values declined during the Great Recession, so did Weis's relations with the majority of the county school board, which two years ago would not extend his contract. By then the mortgage was underwater, with the condo's market value dropping as much as $200,000 from what he had paid for it.
After Weis refused to pay back the loan and sought to turn over the condo to the county office, the board sued him. In a settlement earlier this year, Weis agreed to pay delinquent homeowner association fees and other costs related to his ownership. The board agreed to assume ownership of the condo. The suit cost the board at least $86,000.
After the settlement, Beauchman said, "The law is what the law is, and it protects the homeowner."
In the lawsuit, the board had alleged that Weis didn't use the two-bedroom Axis condo as his primary residence, as required by the terms of its loan. Instead, the board charged, Weis's main home was in Oxnard, where his wife remained during his four-year tenure, and where he is retired.
Board Vice President Darcie Green wrote that she was "looking forward to applying the lessons learned from this experience to any similar situations in the future." But the county board is on the verge of naming a new superintendent, who presumably might be offered a home loan. The board has narrowed its search to one finalist and this week has been visiting the candidate's current workplace.
The board will make an announcement next week, Beauchman said.
Contact Sharon Noguchi at 408-271-3775. Follow her at Twitter.com/ noguchionk12.