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News Update

California Supreme Court rules in decade-long legal battle over Fresno middle school construction contract

After more than a decade-long legal battle over the construction contract for Fresno Unified’s Gaston Middle School, the California Supreme Court ruled last week that the controversial lease-leaseback contract was illegal, the Fresno Bee reported.

Lease-leaseback agreements allow school districts to forego the traditional bidding process of awarding contracts to the lowest bidder in order to pick developers who will front at least some of the construction costs and accept repayment from the district over time, according to the Bee. In 2012, a different contractor sued the district, alleging that Fresno Unified wrongfully used this agreement to sign with Harris Construction.

California Supreme Court Justice Martin Jenkens, in his opinion on the case, determined that the district had the money from bond measures to pay for the construction project, thus not needing the lease-leaseback agreement.

Whether or not Harris Construction will have to pay back Fresno Unified the $36 million it received under the agreement — plus interest — remains in question.