Amendments to Campus Sale Law Pit Cities Against School Districts

Since its passage in 1981, the state law that allows cities to purchase surplus school sites at a discount has been the cause of confusion and controversy and has put a strain on the usually cordial relationship between South Bay cities and school districts. Now three proposed amendments to that law--including one that would repeal it--are further straining those relationships.

“This bill is going to become extremely political,” Redondo Beach City School District Trustee Valerie Dombrowski predicted, referring to the amendment that would repeal the law. “It’s going to be a power play for the cities.”

Representatives of several South Bay school districts have already testified in support of the amendment, written by Assemblyman Gerald N. Felando (R-San Pedro).

But several city officials are now preparing to testify against that proposed amendment and another in the state Senate that would limit cities’ zoning power over closed school sites. The Torrance City Council two weeks ago unanimously passed a resolution opposing both bills.

Incentives Eliminated

Felando’s amendment “would eliminate all incentives for cities to purchase surplus school sites for parks,” said Torrance Councilman Tim Mock, who will probably go to Sacramento to testify against it. “Cities cannot compete with developers.”

The third amendment would strengthen the current law by making it more difficult for school districts to get waivers from the law. It is expected to be voted on by the full Assembly before the end of the month.

At issue is a 1981 amendment to the state education code called the Naylor Act. It allows a city to purchase or lease up to 30% of surplus school sites for recreational purposes for as little as 25% of market value. The exact price is determined by negotiation.

The idea behind the act, said Assemblyman Robert W. Naylor (R-Menlo Park), was to give cities “reasonable opportunity to preserve recreational land without having to pay premium prices for property that had already been purchased by the public. If the cities and schools were governed by the same agency there would be no problem.

“I think if my bill is repealed it will cause the loss of a lot of recreational properties,” he said.

Land Not Set Aside

For South Bay cities, the future of the Naylor Act is particularly important because open land generally is scarce and property values are high. Cities here, particularly the beach cities, developed quickly and without much planning. Most did not set aside much space for parks and recreation.

“I would be the first to be sympathetic” to schools districts, Torrance’s Mock said. “But then how do we get open space? That’s the dilemma I’m in, but I don’t see any other way to do it.”

But while cities are trying to get park land inexpensively, school districts are worried about shortages of funds. School enrollments statewide are beginning to increase, but most school districts in the South Bay are still experiencing declining enrollments and are closing schools.

“I’m interested in cooperating, I just don’t want to be taken,” said Marilyn Corey, superintendent of the Hermosa Beach City School District.

Unfair Advantage

School district officials argue that the Naylor Act gives cities an unfair advantage because city councils also control the zoning on the properties. By refusing to allow residential or commercial development, a city council can make the land unsellable to anyone but the city.

In Hermosa Beach last year, the city council zoned part of a closed school site as open space, the other part residential. The school district received $76,1000 for each of the residentially zoned lots, but only $18,750 from the city for equal-sized lots that were zoned for open space. The district is trying to sell five other lots, but the city council has refused to change the zoning to allow homes to be built.

“It is unfair for one government agency to have power over the property of another public agency,” Corey said.

“The district is entitled and should derive economic benefits of surplus land, but it should be balanced with the overall needs of the community,” countered Hermosa Beach Mayor George Barks. “The land should not be developed to its maximum density.”

First to Use Act

Although many schools in the South Bay have closed in the last 10 years, Torrance is believed to be the first South Bay city to try to use the Naylor Act to purchase a school site.

School districts generally have cooperated with cities’ requests for open space. In Redondo Beach and El Segundo, school districts have given $1-a-year leases to the cities to allow public use of their recreational facilities.

But school officials in those districts say that if they want to sell those properties at a profit at the end of those leases, they should be allowed to do so.

City and school officials in the South Bay are closely following the Torrance negotiations, which have stalled partly because the law, both sides agree, is confusing and ambiguous. The law is not clear as to whether the stated 30% of land available at the discounted price applies to each site or to a total of all closed sites in a district. If it applies to the total, does that include sites previously sold to private developers? And does surplus mean any current unused site, or does it mean any land owned by a school district that is not used for educational purposes?

‘Balancing Process’

“The Naylor Act at best moves us toward negotiating,” said Redondo Beach City Manager Tim Casey. “It does not clearly identify step-by-step the process, but it gets us talking. We understand that each of us has an obligation to protect our interests in the legislative arena.”

In Redondo Beach, city officials have indicated an interest in three school sites. Two would be used for senior citizen housing, the third for open space. Talks are only in the preliminary stages, but Casey said he is confident an agreement can be reached.

“It’s a balancing process,” he said. “Where we want things at less than fair market value we should then be working with the district to assure fair market value for those areas we are not interested in for open space.”

Torrance city officials in November said the city was interested in purchasing only the open space of Greenwood School, about 2.7 acres of the 3.44-acre site, under provisions of the Naylor Act. However, the open space made up 37% of the district’s total surplus sites, which included Greenwood and the 3.5-acre Meadow Park School, which is used for adult education.

Different Interpretations

But in January, Torrance City Atty. Stanley Remelmeyer said he defined surplus as any site ever owned by the school district since 1981 and not currently used for school purposes. That included four sites that were sold to developers for the construction of new homes.

With that interpretation, the entire Greenwood site would be less than 9% of the Torrance district’s total surplus. Not surprisingly, the city now wants to acquire the entire 3.44 acres at a lower-than--market price.

The Torrance Unified School District disagrees with that interpretation and in any case has applied to the state Board of Education for a waiver from the law. Deputy Supt. Bernard Garen said he expects a decision on the waiver request in 60 to 90 days.

Negotiations began with a $900,000 opening offer from the city and the district’s asking price of $2.1 million. The city raised its offer to about $1.6 million and the district came down to about $1.8 million. But neither side has budged from those figures. The city offered to have the matter go to binding arbitration, but the deadline for that offer has passed.

“We’re pondering, they’re pondering,” said Torrance City Manager LeRoy Jackson.

“We’re willing to continue negotiating,” said Garen, who said he doubts the matter will be resolved before he retires at the end of the month.

Short End of Stick

Felando said he introduced his bill to repeal the act because school districts are getting the short end of the stick under the current law.

“Finding sources of revenue for school districts is very difficult,” Felando said. “There is creative financing in real estate, and now it has crept into education.”

Felando said school districts have few options other than to sell surplus properties and use the profits to run school programs. He said the districts’ problems are worsened when city councils change the zoning of the land to open space, prohibiting sales to developers who want to build homes or office space.

“My dedication is to the constituents in my district, and if they want us to help educate our children, then we have to have more money,” Felando said. “Selling properties at a profit helps educate our children.”

Taxpayer Purchase

City officials argue that the city is entitled to a break in the price because the land has been purchased by taxpayers and it is taxpayers who will benefit from new parks.

But Garen of the Torrance School district disagrees. “It’s a bunch of horse manure to argue that the same taxpayers paid for it once and therefore should get it for the reduced price,” he said.

“The bond (to pay for a school’s construction) was taken for educational purposes, not for a park or other recreational purposes.”

While most local school districts support Felando’s bill, the California School Boards Assn. opposes it. Cathy Davis, a lobbyist for the group, said: “We don’t think the bill solves the problem. The city councils who want to acquire sites are basically rezoning them to open space and then buying them for practically nothing. Felando’s bill doesn’t change the city councils’ authority to rezone a site. We are more concerned with the Seymour bill.”

State Sen. John Seymour (R-Anaheim), a former mayor of Anaheim, has introduced a bill that would require cities to rezone surplus school sites they are not interested in purchasing to be compatible with the surrounding area. The bill has already cleared the Senate and one Assembly committee. It is currently in the Assembly Ways and Means Committee.

“The concept of Naylor is very positive,” Seymour said. “My bill simply says that if the city doesn’t buy it then it can’t come back and down-zone the property. It has to be zoned consistent with the surrounding area. They will have a tough time opposing it because it is merely asking for equity.”