Sunday, August 22, 2010

The Rent, The Rent! University Head’s Housing Raises Ire

August 21, 2010, NY Times (Bay Area Edition)

University Head’s Housing Raises Ire


Five minutes before midnight on June 30, movers hauled the last boxes from a spectacular rented home in the Oakland Hills. The tenant’s lease was about to expire, and in his haste to get out, he left behind thousands of dollars of damage to the hardwood floors and Venetian plastered walls.

The tenant was Mark G. Yudof, president of the University of California. His midnight move was the latest chapter in a two-year housing drama that has cost the university more than $600,000 and has drawn senior U.C. officials into an increasingly time-consuming and acrimonious ordeal over the president’s private residence.

The effort to resolve Mr. Yudof’s housing problems has taken place while the U.C., the nation’s largest and most prestigious public university system, struggles with one of the worst financial crises in its history, including layoffs, student protests and tuition increases.

After six years as chancellor at the University of Texas, Mr. Yudof arrived here in 2008, vowing to bring fiscal responsibility to the 10-campus U.C. system. He chose not to live at university-owned Blake House, the traditional presidential mansion, which the university estimates requires $10 million of renovations and repairs.

Instead, Mr. Yudof, 65, moved with his wife into a 10,000-square-foot, four-story house with 16 rooms, 8 bathrooms and panoramic views. He said he needed the house, which rented for $13,365 a month by the end of the lease and was paid for by U.C., to fulfill his obligation to host functions for staff members, donors and visiting dignitaries.

Mr. Yudof held 23 such functions over a two-year period, according to the university. He also ordered a list of improvements and repairs — including air conditioning and 12 phones — that drove up costs and, according to staff members, tied up university officials in meetings and lengthy negotiations on issues ranging from water bills to gopher eradication.

After the Yudofs vacated the property at the end of June, Brennan Mulligan, the landlord, informed university officials that he intended to keep the U.C.’s $32,100 security deposit. Mr. Mulligan requested an additional $45,000 to cover the repairs for hundreds of holes left from hanging art, a scratched marble bathtub, a broken $2,000 Sivoia window shade and other claims.

“At some point, I got a call from the general counsel, and I’m like, ‘Why am I talking to the general counsel?’ ” said Mr. Mulligan, 40, a boyish Hong Kong-based business consultant and a U.C. Berkeley graduate who bought the Oakland house in 2003 after selling his bike-messenger bag company, Timbuk2.

“To me it’s like, ‘Is this how they spend their time?’ ” Mr. Mulligan said.
Among Mr. Mulligan’s list of complaints was the university’s failure to respond to a May 2010 notification from the East Bay Municipal Utility District that the district suspected a water leak on the property. By the time the leak was discovered, shortly after Mr. Yudof moved, the house’s bimonthly water bill had spiked to nearly $5,000 and 1.2 million gallons of water had trickled into the Oakland Hills, according to copies of the bills.

“It took the plumber 10 minutes to find the leak, literally 10 minutes,” Mr. Mulligan said at an evening interview at the house, the lights of San Francisco visible beyond the glass façade of the living room. “There was a broken pipe and a pool of water and I was just like, ‘Wow, this looks like that oil leak in the Gulf of Mexico. It’s just coming out.’”

Mr. Yudof said he was unaware of the leak.

On Aug. 5, Mr. Yudof’s aides presented Mr. Mulligan with a settlement agreement that would allow him to keep the security deposit and receive an additional $19,759.05. The university presented the written agreement to Mr. Mulligan on the same day The Bay Citizen filed a public-records request for information about the university’s expenditures on the house.
On Aug. 8, Mr. Yudof killed the deal.

He said he had been aware of the university’s discussions with Mr. Mulligan but balked at the settlement when he learned about the “outrageous and ridiculous” terms. He said his decision was unrelated to the public-records request.

“I thought it was totally inappropriate what they were doing,” Mr. Yudof said of his staff. “I don’t have to sign a settlement proposal drafted by the staff on this or any other matter. And I didn’t.”

In an interview last week, Mr. Yudof attributed the housing problems and higher-than-expected costs to Mr. Mulligan, whom he described as “the landlord from hell.”
He said Mr. Mulligan was often unresponsive to maintenance requests, and in one instance missed a payment to a vendor, forcing the university to pick up the tab for a significant repair.
According to university records, U.C. spent $19,423 to repair a two-person elevator that sometimes stalled between floors. E-mails released by U.C. under The Bay Citizen’s records request show that Mr. Yudof’s wife, Judith — who has knee problems that make it difficult to climb stairs — gently implored Mr. Mulligan to pay a delinquent bill from the elevator’s installer, which refused to service the elevator until the bill was paid.

The university ultimately used another company to repair the elevator; on one occasion U.C. paid $3,180.24 in overtime ($530.04 per hour) to complete the work, according to a copy of the bill.

Mr. Mulligan said he unknowingly missed the payment to the elevator company but then immediately sent a check by express mail. He said he did not see a bill from the university until he entered into negotiations for damages two years later and U.C. officials sought reimbursement.

The university paid $70,806.73 to move Mr. Yudof to Oakland from Texas and $39,107.30 to move him again when Mr. Mulligan refused to extend the lease. The frantic move from the Oakland location lasted from 7:30 a.m. to 1:45 a.m. the next day, according to billing records. During the three-week search for a new house, the Yudofs took up residence in a discounted suite at the Claremont Hotel & Spa in the Berkeley Hills, at a cost of $8,394.16 to the U.C.
“I don’t think it was a good experience,” Mr. Yudof said, referring to living in the Oakland house. “Under the circumstances, it was the best I could do.” The home was comparable to that of other university presidents, he added.

The U.C. spent $127,443 on security at the house, following threats against Mr. Yudof and several visits to the house by protesters.

Despite the near settlement, university officials said they intended to go to mediation with Mr. Mulligan and were prepared to litigate to recover the security deposit and other damages.
The money spent on the house came from a private endowment. It was a relatively small sum for a $20 billion, 180,000-employee public university that supports 10 campuses, five medical centers and a national laboratory. But the lavish spending and the numerous hours spent by university officials managing Mr. Yudof’s personal affairs have chafed some members of his team.

“He essentially turned the Office of the President into his personal staff,” a university official said.

Much of the activity took place out of public view. The Office of the President filed at least six reports of “interim actions” related to the house that took place between public meetings of the Board of Regents.

Mr. Yudof and his wife have settled into a new home in Lafayette. The rent is $11,500 a month. The house “potentially will save the university as much as 25 percent of what was required to maintain the previous residence,” according to a report filed to the board.

The new house is 4,837 square feet, less than half the size of the Mulligan residence.
Tucked in the new lease is a provision designed to help protect the landlord against damages incurred. “Landlord must approve any items affixed to the walls,” it reads.

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