The Academy of Art University will pay about $38 million in cash so San Francisco can build affordable housing under a new agreement to resolve years-old claims that the institution illegally converted affordable housing units into student housing.
San Francisco sued the Stephens Institute, which does business as the Academy of Art University, in 2016, the San Francisco Chronicle reported. The for-profit institution allegedly ignored zoning codes, laws covering signage and historic preservation rules when it converted affordable housing units.
That same year, the sides reached a $58 million settlement that included an agreement the Academy of Art would build or restore low-income housing units. But it never did so, according to the Chronicle.
Under the newly updated agreement, the institution will convert properties, restore historic buildings and pay millions in fines and fees. A City Attorney’s Office spokesman told the Chronicle the new agreement has “real teeth” for enforcement.