SANTA CRUZ -- This time next year, Pacific Collegiate School staff and students could be packing up their books and laptops to put on a moving truck.

Cynthia Hawthorne, president of the Santa Cruz City Schools board, said Thursday that negotiations have failed between the district and one of the nation's top charter schools over the renewal of Pacific Collegiate's lease of the district's 3,500-square-foot property on Swift Street. She said PCS is expected to leave by the end of the lease period, which is June 2009.

Hawthorne declined to declined to say why six months of talks between PCS and a consultant hired by the district did not lead to a resolution by the March 31 deadline, but said it ultimately came down to money. A PCS official said the district wanted the school to pay more than double the current annual rent.

"We just can't leave any revenue on the table," Hawthorne said, referring to the cuts school districts have made in recent months in anticipation of state budget cuts. "We weren't able to settle on a dollar amount."

But that was news to PCS on Thursday, as leaders of the school were waiting to hear back from the district about a final offer made by PCS in April. Losing the lease creates another funding issue for the school to grapple with just weeks after its board voted to grow 30 students per year as a way to offset K-12 funding cuts and a growing wait list of prospective students.

"Because we hadn't heard from them, I thought we could still be working toward an agreement," PCS board President Deepika Shrestha Ross said of the district. Ross, who was voted in last Wednesday, has served as the school's liaison with the attorney the district hired to handle negotiations.

Hawthorne said the district had requested a new lease amount in line with a recent appraisal of the property, which is the former Natural Bridges Elementary site on the Westside. But Hawthorne declined to state the amount the district requested in rent because the matter was discussed in the school board's closed sessions.

Ross said the district wanted PCS to pay $35,000 a month, or about $1 per square foot, which would equal about $420,000 a year. The school's current five-year lease on the property has cost a total of about $1 million -- an average of $200,000 per year -- though the rent payments were structured to be less expensive in the beginning and top out at $275,000 this year.

The county administered the school's charter nearly a decade ago after the school district refused, marking the beginning of a sometimes tense relationship between the two organizations that continued even after PCS began leasing the former Natural Bridges school, which was closed by the district amid funding shortfalls in 2003.

PCS, which serves about 430 students, quickly developed a reputation for academic excellence, winning high marks from the state and U.S. News and World Report rankings as the nation's No. 1 charter school and No. 2 public high school.

Ross said PCS offered to enter mediation, but the district did not want to. The school will now form a committee to determine whether to lease another space or look at options for buying its own facility, Ross said.

Because Proposition 39 requires school districts to provide equal facilities for charter school students who lived within their boundaries, Hawthorne said the district would investigate a site suitable for PCS students. PCS can decline that offer, though it would mean forfeiting the district's financial contribution.

Hawthorne said the district has received several inquires from other groups about renting the site, though she declined to offer specifics. She said the district would not sell the property.

Contact J.M. Brown at 429-2410 or