$50-Million Hotel, Office Complex Planned : School Property Finally Sold in Norwalk

After six years of trying, the Norwalk-La Mirada Unified School District has finally succeeded in selling an unused 20-acre site that city officials say is the key to local redevelopment efforts.

School board officials Monday unanimously voted to sell the Wright School on Civic Center Drive to London Pacific Investments of Redondo Beach for $9.1 million.

The school property, adjacent to City Hall and Norwalk Superior Court, is the largest unused downtown parcel. Plans call for a $50-million complex that will feature a 10-story, 260-room hotel; a 6-story, 110,000-square-foot office building; a 30,000-square-foot retail, theater and restaurant complex, and 320 apartments.

The district has been trying to sell the property since 1979, a year after the intermediate-level school was closed due to declining enrollment. But the sale was delayed by unsuccessful business deals, legal battles and a long-running community dispute over a proposal to build a card club on the school property.

Special Election

In October, 1983, voters approved an ordinance to permit a downtown card club at a special election. But after card clubs in Commerce and Bell suffered financial losses, arrests and criminal indictments, the Norwalk City Council voted unanimously in March to rescind the ordinance and get out of the card club business before the first hand was ever dealt.

The legal battles involved a Santa Fe Springs developer, Johnny Johnson, who originally proposed building a hotel and card club on the property. In 1984, Johnson sued the school district, claiming that district officials had conspired with other developers in an attempt to cut him out of the project.

The suit in effect prevented district officials from selling the property throughout 1984. In February, Johnson dropped the suit in exchange for the district dropping a countersuit against Johnson.

School board members expressed relief that the property was finally sold. “We really are so pleased because it’s been a thorn in our side,” said board vice president Bill White.

The sale also was enthusiastically received by city officials.

‘Catalyst for Redevelopment’

“I see this as the catalyst for redevelopment,” said Mayor Marcial (Rod) Rodriguez. “We’ve needed a major project to get the city moving. And this city is willing to do whatever it takes to get this development in short of anything illegal.”

The Wright School property is in a 600-acre city redevelopment district that includes City Hall, the courthouse, and property along Firestone Boulevard.

Jules Walder, president of London Pacific--the high bidder among three firms that sought the property--promised in a brief speech to school board members that he would be “sensitive to the needs of the community.” He also predicted that the proposed complex, which he said would be built in three years, would be the “keystone to redevelopment of the city.”

The sale puts Norwalk in an intense competition to build hotels in the Southeast area. In Downey, a $13-million, 220-room Granada Royale Hotel is under construction, and in Whittier, a $13.5-million Hilton also is being built. A Holiday Inn was built in Santa Fe Springs last year, and South Gate, Huntington Park, Montebello and Pico Rivera officials are scrambling to have their own hotels.

“Economists say that if all the hotels that are proposed were built some wouldn’t survive, but they’re not all going to be built,” said Mike Wagner, Norwalk’s redevelopment director.

Lou Banas, Norwalk’s mayor pro tem, said the city’s main concern in developing the property is to have a “high quality hotel” that will attract tourists and business conventions. The city’s largest hotel is the three-story, 250-room Ramada Inn on Firestone Boulevard.

“What we’d like is a hotel that’s a step up in class from the Ramada,” Banas said, adding that the city wants to attract “higher-quality vacation and business travelers that we have not been able to attract in the past.”

Close to Freeways

Banas and other officials say the city has an edge in the hotel competition because of the city’s proximity to the 605 and 5 freeways and Orange County.

The City Council and Planning Commission have scheduled a joint meeting at 7:30 p.m. Monday with developer Walder at City Hall.

Lynn Sedway, a real estate consultant hired by the school district, said she checked references on projects done by London Pacific in the past and that the firm “passed with flying colors.”

“We know these people can do it,” she said.

London Pacific is currently building a 365,000-square-foot office complex in Santa Ana opposite the Santa Ana Civic Center.

Howard Rainey, the district’s administrator of business services, said terms of the deal call for receiving a $2-million down payment within six months and the remaining $7.1 million plus interest within 3 1/2 years.

The money will be used to pay for maintenance projects such as roof repairs and blacktop patching that the district has postponed in recent years because of a lack of money, Rainey said.