In the weeks since Eureka City Schools decided to break off negotiations with the California Highway Patrol and enter into an agreement with a mystery developer to trade 8.2 acres of its old Jacobs Middle School campus for a small home on I Street and $5.35 million in cash, several of the entities with a vested interest in the site have pleaded ignorance as to who is behind the transaction.

Gail Rymer, a spokesperson for both Citizens for a Better Eureka and the Eureka Housing for All Initiative, both of which aim to block Eureka's years-long plans to convert city-owned parking lots into multi-family housing developments, with the initiative also seeking to rezone the Jacobs property, has repeatedly told the Journal the entities are uninvolved with the transaction. The same is the case for Security National, the company owned by local businessman Robin P. Arkley II, which has bankrolled both Citizens for a Better Eureka's lawsuits against the city and the initiative effort.

"No one from Security National, the Housing for All Initiative or Citizens for a Better Eureka have any involvement in the Jacobs Property swap," she told the Journal on Dec. 15, a day after Eureka City Schools voted unanimously to enter into the deal with developer AMG Communities — Jacobs, LLC, which filed articles of organization with the California Secretary of State's Office just two days before the school board's vote.

A couple of weeks later, Arkley himself appeared on the local radio show Talk Shop and told host Brian Papstein he was uninvolved with the transaction.

"I know nothing and I'm pretty darn happy with that knowledge base," Arkley said.

A new website — thejacobscommunity.com — which Eureka City Schools representatives have indicated was created by AMG Communities — Jacobs, LLC, even actively distances the transaction from Arkley. Included in a list of "Frequently Asked Questions" on the site is: "Is Rob Arkley an owner or investor in AMG Communities? — to which the site states he is not.

However, a copy of the executed property exchange agreement released to the Journal on Jan. 23 from Eureka City Schools is signed by attorney Brad Johnson on behalf of the LLC, the same attorney who has filed the aforementioned lawsuits against the city and acted as legal counsel for the initiative.

Johnson responded to a message left at his law office by the Journal through an assistant, who emailed a statement from an email address affiliated with the jacobscommunity.com account, saying Johnson is bound by professional rules of conduct to keep his clients' identities confidential unless they choose otherwise or their identities are in a public document.

"With this in mind, I have been authorized to disclose that AMG Communities — Jacobs, LLC, is not owned or managed by the proponents of the Housing for All and Downtown Vitality Initiative or by Security National," Johnson said in the statement, adding that the LLC is working toward the "best plans, with community input," for redevelopment of the site.

In response to follow up questions, Johnson declined to state whether he disclosed to Security National, Citizens for a Better Eureka or Housing for All that he was also working on behalf of the LLC seeking to purchase the Jacobs site. In response to a request to interview the principles at the LLC, Johnson said the new entity is "focused on closing escrow and listening to the community's ideas for the redevelopment."

Meanwhile, multiple messages left for Thomas Swett, a Sacramento attorney who filed the articles of organization for AMG Communities — Jacobs, LLC, and has acted as its agent in negotiations with Eureka City Schools, have gone unreturned, as has an interview request emailed to an address listed on the LLC's new website. Rymer, meanwhile, told the Journal her understanding is that Johnson «has multiple clients in Humboldt County» but that Citizens for a Better Eureka, the ballot initiative proponents and Security National «are not involved with Brad or his client or clients on the Jacobs property.

The revelation is the latest twist in both the decades-old saga of the Jacobs campus and seemingly Arkley's multi-pronged efforts to block Eureka's plans to develop multi-family housing projects on a host of parking lots in its downtown and Old Town areas.

Built in 1956, Jacobs Middle School closed in 1982 and the site then served as a continuation high school until shuttering completely in 2009. The district officially deemed the site "surplus property" in 2019 and has been working to sell it since, razing its old dilapidated school buildings in 2021. The city of Eureka sought to purchase the property — reportedly officially offering $2.8 million for it — before abandoning the efforts after being informed the district would not accept less than $4 million, which City Manager Miles Slattery said was well above the property's appraised value.

The California Highway Patrol then entered the fray and had been negotiating with the district for months, looking to relocate its Northern Humboldt headquarters to the site. Those negotiations — which appeared on the district board's closed session agenda seven times in 2023 — progressed to the point that CHP held a community meeting to gauge neighborhood support for its plan. According to the district, CHP had offered $4 million for the site.

Then, seemingly out of nowhere, the district released an agenda for its Dec. 14 board meeting that included a closed session item to discuss "price and/or terms of payment" for the Allard Avenue site that listed negotiating parties as CHP and AMG Communities — Jacobs, LLC. Hours later, the board had approved the agreement to "exchange" the Jacobs site for a residential property at 3553 I St. — which includes two housing units and was dubiously valued at $650,000, while the real estate website Zillow estimates it to be worth $370,900 and its county assessed value is listed as $271,327 — and $5.35 million in cash.

The deal — and the way it was rushed to approval with minimal public discussion, review or input — immediately raised a host of questions, including the identity of this mystery developer and their plans for the property, which has been a focal point of the Housing for All initiative, which aims to block Eureka's parking lot plans, ostensibly replacing the housing they would create through the rezoning of the Jacobs site from public to one that would allow residential development

The new website's FAQ section opaquely addresses some of these.

"Who is AMG Communities?" it asks.

"AMG Communities is backed by a small investment firm that holds interest in real estate and businesses," the site states. "The investment firm creates single-purpose entities for all its investments for tax, liability and transferability reasons."

But the site does not identify the "small investment firm" or list any of its properties. It's also worth noting that while there are a host of real estate development companies with AMG in their titles, it's unclear if this LLC is affiliated with any of them. A prominent one — AMG Land Development, which boasts having built more than 5,000 housing units in Alaska and California, with another 10,000 in planning or construction — told the Journal it is not affiliated with AMG Communities — Jacobs, LLC., while others did not immediately respond to Journal inquiries.

It's unclear whether Eureka City Schools negotiated — or even communicated — with any of the LLC's principles or just Swett. Asked who the district has been working with specifically on the land exchange deal, , new district Superintendent Gary Storts said the district's attorney has been working with the LLC's legal counsel. Storts did not respond to a follow-up question inquiring whether that had been the district's sole point of contact with the mystery developer throughout the process. He similarly did not respond to questions asking whether the district had seen some documentation indicating Johnson or Swett were authorized to enter into an agreement on the LLC's behalf.

It's perhaps worth noting here that Johnson and Swett appear to have some history together, as Swett worked at a law firm Johnson co-founded — Harrison, Temblador, Hungerford & Johnson LLP — for nine months in 2015.

The website's FAQ also states that "no firm plans have been developed yet" for the Jacobs site, which would be atypical for an acquisition of this size. Typically, a developer paying $6 million for a property — particularly when the offer is apparently well above market rate and the site's appraised value — would have plans for the acquisition, making sure they would pencil out financially as a part of due diligence. It would also be typical for a developer seeking to acquire such a large vacant site to reach out to city government about possible zoning changes, infrastructure improvements and possible permitting issues, but Slattery said no such communications have taken place with anyone from AMG Communities, LLC.

"There's been none," Slattery said, adding that's atypical for prospective buyers in general. "In my experience, prior to a transaction happening, that [communication] always happens — especially for a vacant property."

The agreement between Eureka City Schools and AMG Communities, LLC, also appears atypical for other reasons.

First, one of the properties at the heart of the land exchange — 3553 I St. — remains in escrow from a separate transaction, with its prospective buyer apparently having then agreed to swap it for the Jacobs site. (Scott Pesch, the real estate agent representing the buyer, declined to offer a timeline for closing that transaction, disclose the buyer's identity or the terms of the deal when contacted by the Journal.) Then, the agreement specifies a 14-day "feasibility" period in which both parties can conduct property inspections and terminate the deal. This period has obviously long since passed, but Storts, who took over for former Superintendent Fred Van Vleck days after the December board meeting, said the district and the LLC are "working on an extension to the 14-day review period." In response to follow-up questions, Storts said the district did not have a closing timeline to finalize the deal.

The agreement also seemingly does not require a down payment from the LLC for the $6 million deal, which experts say is atypical, and instead simply requires both parties to pay a non-refundable "independent consideration" to the other, with the district paying the LLC $100 and the LLC paying the district $1,000. Notably, the agreement also provides that either party can back out of escrow if they determine "all conditions" set forth in the agreement cannot be met, with the terminating party paying any cancellation charges.

"Parties agree that this sum will fully compensate the non-terminating party for any and all damages related to the termination of this agreement and cancellation of the escrow and herby waives any and all claims for additional compensation in connection therewith," the agreement states.

The deal and recent revelations raise a host of questions: Who is the mystery developer behind the deal? Why would they agree to pay $2 million more than any existing offer for a property they seemingly had done little due diligence on? Why is Johnson, the attorney representing Security Nation's housing initiative and suing the city on its behalf, a signatory to the agreement while the parties he represents insist they are uninvolved?

As the Journal went to press Jan. 23, the city of Eureka was set to host a community meeting to discuss possible zoning changes to the property, but it seemed unlikely attendees would get answers to these questions. Slattery said he reached out to Swett with an invitation for someone from AMG to attend the meeting to discuss the LLC's plans for the property. According to Slattery, Swett said he is "not a partner or a principle in the LLC — he's just an agent for process" but that he would forward Slattery's inquiry on "to his contacts." Slattery said he received no further response.

Thadeus Greenson (he/him) is the Journal's news editor. Reach him at (707) 442-1400, extension 321, or [email protected].