By the Daily Post staff
A company that subsidized KCSM-TV is seeking a preliminary injunction to stop the $12 million sale of the non-commercial station to a public broadcaster in Santa Rosa.
KCSM-TV’s owner, the San Mateo County Community College District, called the legal action “frivolous.”
The company, LocusPoint Networks, also accuses the college district of trying to circumvent public bidding laws and violating the California Open Records Act and the Brown Act, which regulates public meetings.
In 2013, the college district decided to sell Channel 60, which was losing money and administrators felt didn’t serve an educational purpose any longer. The district entered into an agreement with LocusPoint, a subsidiary of the Wall Street firm The Blackstone Group, to have it fund the station until an FCC spectrum auction in 2016, when the station could be sold off for millions. LocusPoint, which paid the district $3.6 million to keep the station going, was expecting to get 35.6% of the proceeds.
On Nov. 15, 2016, a college vice president was supposed to place the station up for sale in the spectrum auction by using an FCC website. However, the vice president, Jan Roecks, didn’t do so for reasons that remain unknown. At that time, the station could have been sold for $114 million.
However, LocusPoint contends that the district falsified a document saying it had put the station into the auction so the district could continue to receive subsidy payments from LocusPoint.
LocusPoint said it didn’t find out about the failure to enter the FCC auction for another three months.
Backroom deal alleged
The lawsuit filed Tuesday contends the college district violated state law by setting up a sham process to sell the station to KRCB, a public broadcaster in Santa Rosa.
LocusPoint contends the district arranged to sell the station behind closed doors to KRCB and that no request for proposals for the station was posted on the district’s website or published elsewhere, an apparent violation of state law.
“The district’s RFP (request for proposals) process was thus far from ‘public’; rather, it was designed to ensure that RCB (the parent of KRCB) would have the highest bid,” LocusPoint’s suit said.
The suit suggests that KCSM-TV would have attracted an offer higher than KRCB’s $12 million had the proposed sale been publicized through a public RFP process.
The lawsuit said the district attempted to have its board approve the sale in a public meeting Sept. 20. After the district released the meeting agenda, saying the approval was scheduled at 6 p.m., it changed the agenda online to say the time would be 5 p.m.
LocusPoint contends the district changed the time to deprive the public an opportunity to comment on the sale. People would show up at 6 p.m. and find the sale had been approved an hour earlier.
The time change also appeared to violate the Brown Act.
The lawsuit said the district was “caught red-handed.”
But the district’s lawyer, Eugene Whitlock, said the time change was a typographical error but he advised the board to re-do the vote, which occurred Oct. 11.
LocusPoint also claims that the district withheld records it had requested regarding the sale, in violation of the California Public Records Act. Among the documents LocusPoint wants to see is the request for proposals the district claims it sent out for the station earlier this year.
There is no indication when the San Mateo County Superior Court would rule on LocusPoint’s request for a preliminary injunction to halt the sale. The sale still must be approve by the FCC before the license is transferred.
‘Most frivolous of all’
“LocusPoint Network continues to waste this community’s resources with frivolous legal maneuvers, and Tuesday’s complaint was the most frivolous of all,” said college district Chief of Staff Mitchell Bailey. “LocusPoint’s gross negligence and breach during the auction violated the contract rights they are now trying to twist to stop the sale.”