Santa Monica Schools Earn Income from Developments

An example of how public and private sectors may work together for mutual profit is taking shape in Santa Monica, where the Santa Monica-Malibu Unified School District has agreed to lease three of its sites to private developers.

The transaction has been termed “the most significant joint-occupancy ground lease in the state between a public school district and private sector developer.” The lease is for 66 years at $400,000 a year.

Terms and conditions of the lease were negotiated and processed by Sage Institute Inc. of Westlake Village. The developers, City Developers Inc. and Midas Properties Inc., are building a $4.3-million, 76,000-square-foot center, known as Santa Monica Business Park, with industrial space and school district headquarters at 1651 16th St., formerly the district’s continuation high school.

The same developers are also building Colorado Business Center, a $5.05-million, 39,000-square-foot commercial office/industrial complex, on the district’s site at 900 Colorado Blvd., which was a warehouse maintenance and operations headquarters. Completion for both projects is projected early next year.

Plans are also under way for the developers to build a $35-million hotel and retail complex on district property on 4th Street, where the district’s headquarters are presently located. Construction on the hotel is expected to begin next summer.

Michael D. Mayer, a partner with Midas, noted that the projects “demonstrate how school districts may convert surplus properties into continued, high-income producing assets.”