SAN FRANCISCO (CBS SF) — The city of San Francisco on Friday filed a civil suit against the Academy of Art University for running what city officials called a “real estate scheme for profit.”

The suit filed in San Francisco Superior Court also says the university “flagrantly ignored and flouted zoning restrictions.”

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“Academy of Art, quite simply, is an egregious land-use scofflaw and its defiance persists at the worst possible time for our residents,” said San Francisco City Attorney Dennis Herrera.

Academy of Art University is the largest private art school in the country, occupying 40 buildings in San Francisco. Herrera said at least 23 of them are being used illegally for things like offices and dorms. The suit charges that those violations have been ongoing for 10 years.

“The scale of Academy of Art University’s defiance has been breathtaking,” said Herrera.

The city’s Planning Department admits it has given the university some breaks over the years. Most recently, it allowed the university more time to finish an environmental impact report that is already five years behind schedule.

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“When you have parties as you do in this case that want this resolved, you don’t have to file a lawsuit,” said the university’s lawyer Jim Brosnahan

Brosnahan said the university is offering to lease a building to a non-profit for affordable housing and pay $10 million to the city over time.

“Our plan is to wrap all this up in a resolution that is satisfactory to the planning commission,” explained Brosnahan.

But city leaders say the offer is too little, too late.

“The Academy has played San Francisco for a fool, but that is coming to an end today,” said San Francisco Supervisor Aaron Peskin.

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In addition to fines and penalties, the lawsuit seeks a permanent injunction forcing the university to restore all units that are zoned for housing into actual housing. Herrera says that accounts for about 300 homes.