School Land Is a Tough Sell Despite Its Allure

Times Staff Writer

Weeds have pushed through the cracks in its vast asphalt playground, teen-agers have spray painted the names of their favorite rock groups on its walls and one of its buildings has been partially gutted by an intentionally set fire.

But Glendale School District officials are less concerned about the ramshackle condition of the vacant Field Elementary School than they are with the land it sits on.

The property, on Central Avenue just north of Glenoaks Boulevard, has been called "a real peach" by one prominent developer. City Councilman Jerold Milner has labeled it the most desirable piece of available property in Glendale. And the land is considered by many to be the district's largest unused asset.

But finding a developer willing to build on the 4.8-acre site has not been easy. Since negotiations to lease the property for nearly $400,000 a year to a Los Angeles firm recently broke down, district officials have found themselves back where they were in 1981 when the 60-year-old school was closed because of declining enrollment.

The district needs the money, either from a lease or sale of the property, to restore programs that were cut from the budget in recent years because of a reduction in state funding.

Reconsidering Offer

This month, school board members will begin reconsidering the terms of their offer to developers, who have been hesitant to enter into a contract because the district wants to lease the property rather than sell it, said district Superintendent Robert Sanchis.

Before the breakdown in the most recent negotiations with a developer, district officials had been counting on using the money to restore the sixth period in the seventh and eighth grades. Parents have been calling for such a move since the classroom time was eliminated four years ago in a budget reduction move.

But because he is anticipating increased state funding and possible revenues from the state lottery, Sanchis said he will include a request for restoration of the sixth period in his May budget to the school board, despite the breakdown in the Field property deal.

Some area developers have been critical of the school district's handling of the property, arguing that the Field site has an estimated value of $5 million and that it would actually be in the district's long-term interest to sell the land.

"It's a top location in town, but if they don't want to sell it, I just don't see much interest among developers," said Bob Stevenson of the large Glendale firm of Stevenson-Dilbeck Development Corp.

Wayland Parsons, deputy superintendent of administration, said the district is anxious to see the property start generating some income but warned, "We won't jump at any deal that comes our way."

"It's a valuable piece of property that's just sitting there, not bringing in any money," said Parsons, who is overseeing negotiations with developers. "We want to take some action on it, but we're proceeding carefully because there is so much at stake financially."

The property is ideally suited for development, Parsons said, because it is large enough to build a sizable profit-making residential or commercial complex and it is close to the city's business district. It is also located in a reasonably well-off neighborhood.

Parsons said that since the deal with the Los Angeles-based California Coast Development Group fell apart two months ago, he has been contacted by a few developers who have expressed interest in the property. The district is now holding off until board members decide whether they again want to lease the property or sell it. Sanchis said the latter option "is possible but unlikely."

One advantage that the district has is the City Council's current discussions over Glendale's Master Plan. If adopted, the plan would rezone the Field Elementary School site from single-family to high-density residential development. A decision on the master plan is expected by early summer, and, if approved, it would allow a developer to build without having to go through the time-consuming zone change procedure now required.

The district is hesitant to sell the property, fearing a possible cutback in state funding because of the large infusion of cash that would accompany the sale. Sanchis said that if Glendale's population increases dramatically in the future, the district may want to turn the property back into a school. That would not be possible if the land is sold.

Request for Bids Issued

Two years ago, the district issued a request for bids for the property, seeking a 65-year lease and payments of $395,000 a year. Only California Coast responded to the offer, although three other developers initially expressed interest before backing down because of the lease arrangement.

Edward Miller, director of development for California Coast, haggled with the City Council for several months, first to get a zone change allowing construction of a $12 million housing complex, then over financing of the project.

Miller, who changed his design plans three times, in part to calm area residents who feared his proposal would severely increase traffic and parking problems in the neighborhood, finally pulled out of the deal when the City Council refused to issue tax-exempt bonds to finance the project.

Miller's fourth plan included 240 apartments instead of the 279 he originally proposed. However, he said that the pared-down complex would generate less income through rent payments, and such a loss would have to be offset by tax-exempt bonds. The use of such bonds would allow him to pay millions of dollars less than if he used conventional mortgage financing.

Council members Ginger Bremberg and Jerold Milner voted against granting the zone change on the basis of Miller's request for tax-exempt bonds, arguing that a developer awarded such a prime piece of land should be able to come up with acceptable plans that would not require a subsidized loan.

'Didn't Do Homework'

"I think that in this particular case, Miller and the school district didn't do their homework and were looking just at what was best for themselves rather than the community," Milner said. "They possibly thought that with the district being involved, the City Council would approve any project. And that is just not the case, because what is built on that land is going to be there a long, long time, and I'm concerned about that."

Miller, however, is defensive, saying that the district should have consulted the council before putting out bids for the property. He added that his company spent $250,000 on architectural fees, various land studies and other costs during the time he spent trying to get approval for the project.

"The Glendale City Council is very tough when it comes to what the city should look like and what development should occur, and that is a good trait," Miller said. "I just wish the council and the school district had consulted a little more so I wouldn't have had to go through all this."

Developer Stevenson has suggested that the district sell the property for condominium development, rather than apartments, because he believes condominiums are more in demand than rental units. Money from the sale could then generate interest that would at least equal the amount that the district would receive from a lease arrangement, he said.

"I think you really have to reduce the density . . . and play to the market," Stevenson said. "I don't think a large apartment complex on that location would work. You could build 100 condos on that lot, and the city and the district would do very well for themselves."

Stevenson added that his firm would be interested in such a development but not on a lease arrangement.

However, district officials argue that a section in the education code states that any money generated through the sale of property must be put in a fund that can be used only for future construction and deferred maintenance.

Such a restriction would prevent officials from using the money for instructional improvements. A lease arrangement, on the other hand, would provide the district with a source of income that it could depend on every year for any educational improvements, officials said.

In addition, said board President Carl Raggio, if California experiences an economic recession in coming years, lawmakers may rule that school districts having a financial surplus should receive less state funding until the surpluses are less than 5% of their total budgets. A $5-million surplus generated from the sale of Field Elementary School could mean a corresponding reduction in state funding for Glendale, Raggio said.

"Very frankly, I don't know if we can trust the state," said Raggio, who has announced that he is leaving his district post to run for City Council. "We feel a sale of that property would be Glendale's money, and what it could come down to is our being penalized for being fiscally sound. We got burned by Proposition 13, and although it's unlikely the state would try to take our money, we would rather take some measures so we don't get burned again."

The district currently leases two other schools in La Crescenta that were closed in recent years. Portions of Clark Junior High are now leased to the city for community projects for a small annual fee, and Valley View Elementary School is being leased to an Armenian church organization for about $50,000 a year.

John P. Starkey, whose large development firm in San Diego was originally interested in the property, said he will "take another look at it."

"That property is a real peach, and we have definite interest," said Starkey, who contacted the district when developer Miller's plans began to bog down in City Council. "I'd prefer to buy it outright, but we'd still consider a lease arrangement, although I don't like that much."

Meanwhile, Miller said he has "lost all interest in the property," and predicted that if the district again decides to lease it, the problems he encountered will again surface for other developers.

"The housing complex we proposed was the only one that would work, and if it didn't work, I don't see how it would work for anyone else," Miller said. "If that's the case, it's going to be the same thing all over again."

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World