Academy of Art University Settles $20 Million Cash Lawsuit With City of San Francisco

The city values the settlement at $60 million in total.

Elisa Stephens, president of the Academy of Art University, at the United Nations on November 19, 2015. Photo Jemal Countess/Getty Images.

San Francisco’s Academy of Art University has agreed to pay $20 million in cash to settle a lawsuit by the city regarding “widespread land-use violations,” Forbes reports.

The for-profit school will additionally provide San Francisco with $40 million worth of low-income housing for seniors, adapting a Nob Hill dormitory to that purpose, and build affordable housing on one of its properties, for a total of at least 160 units, according to the city’s announcement, released on Monday.

Owned by the wealthy Stephens family, the school had bought or leased some 40 properties citywide, and racked up violations of environmental, historical preservation, or building code requirements, says the statement. Forbes estimated the fortune of school president Elisa Stephens and her father, Richard Stephens, to be at least $800 million.

A building owned by the Academy of Art University in San Francisco. Photo Andy Melton, via Flickr.

A building owned by the Academy of Art University in San Francisco. Photo Andy Melton, via Flickr.

“Academy of Art University and its real estate affiliates behaved for more than a decade like they were above the law,” city attorney Dennis Herrera said in a statement. “We’ve ensured those days are over. After years of meeting our good faith with bad faith, the academy has finally agreed to do right by the people of San Francisco. … Our work here sends a clear message: No matter how wealthy or politically connected you may be, the same rules apply to everyone.”

The school’s rampant growth cut into the city’s available housing, already at a premium. Rapid gentrification in neighborhoods like the Mission has sparked protest from longtime residents there.

However, representatives of the school maintain they did nothing wrong, and just want to move forward. “We deny every single allegation in the complaint,” said Jim Brosnahan, one of the university’s lawyers. “The settlement is fair to the city because they get tremendous value, and it’s fair to the academy because it allows it to return to its main mission: the education of art students.”

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