Price Is Right but Payment Plan Tangles School Sale

The city and the Torrance Unified School District have agreed on the sale price--$1.9 million--for the former Greenwood School that the city wants to buy to use as a park, but they have not agreed on how the money should be paid.

A settlement had been expected last week after representatives of each side met privately and agreed on the price and came up with four possible ways to pay the $1.9 million.

At last Monday’s school board meeting, however, the board agreed in a closed session that only one of those options was acceptable. The board wanted the city to make a $1.6-million down payment and pay the $300,000 balance over three years at 8% interest, for a total payment of $1.948 million in principal and interest.

But when the City Council met in private the next night to consider that offer, it selected a different option. The city wanted to make a down payment of $475,000 and to pay the balance plus 8% interest in three equal annual payments of $551,000, for a total payment of $2.128 in principal and interest.

The other two options were:

- The city would pay only $152,000 in interest the first year and spread the principal and interest over three years, for a total payment of $2.204 million.

- The city would make three annual payments at 8% interest, for a total payment of $2.204 million in principal and interest.

When negotiations broke down in July, the city’s final offer had been $1.6 million in cash for the 3.4-acre site, and the district’s final asking price had been $1.875 million cash.

City Offer Rejected

The school board in a special meeting Wednesday rejected the city’s offer and reaffirmed that the only offer acceptable was the $1.6-million down payment. It was the first time the options have been made public.

“When we adjourned our meeting on Monday we were very hopeful that this would be resolved forever,” said Trustee Doris Casstevens, who is stepping down from the board after deciding not to seek a second term. “We assumed that you would come back with that offer, or tell us why you could not accept that option. This has been very surprising to us.”

Trustee Fumiko H. Wasserman, who also did not seek reelection, explained that by having $1.6 million up front, the district could earn more interest than with $475,000. She said that with the larger amount, the district could withdraw $300,000 to paint buildings, for example, and still have a large amount collecting interest that could be used for classroom programs.

Mayor James R. Armstrong, who presented the city’s offer in person Wednesday, said he would take the district’s counteroffer back to the City Council for consideration at Tuesday’s council meeting.

Postponement Preferred

Armstrong, however, said he would prefer that any further negotiations be postponed until the newly elected members of the school board are installed. Three new members to the board were elected last week and will be sworn into office Dec. 2. The present board will hold one more meeting on Nov. 18. The board did not say whether it would hold the matter over until December.

Armstrong said he had previously warned school board President Owen Griffith that the $1.6-million down payment would be the most difficult option for the city to accept.

“I’m disappointed,” Armstrong said after the board meeting. “The offer is good. Tonight is the first formal counteroffer that the school district has made. Up to now all the negotiating has been on our part. But as badly as I want it, I don’t think the city should be taken through the wringer.”

Armstrong said the $1.6-million down payment “can be done, but it is the hardest way for us to go. It stretches capital funds really thin. It defers other projects, perhaps. It can be done, but you’re cleaning out the cupboards to do it and I’m not sure the council is ready to do that.”

Frustration Expressed

At the school board meeting Wednesday, Armstrong expressed the frustration both sides have experienced in the last 10 months of negotiations. “The city and the district have differed on this issue from its inception,” he said. “I think these differences have been honest ones of interpretation and perception. Reasonable people can and do differ.”

Meanwhile, the state Board of Education was expected to grant the district a waiver from a state law that requires the district to first offer the 3.4-acre school site at a reduced rate to the city before making the site available to a private developer at market value, said Leroy Hamm, a consultant with the state board. The Torrance school board, however, said that even with the waiver it would continue negotiating with the city for a reasonable time to reach a settlement.

An attorney for the state Board of Education said that the waiver would invalidate a temporary restraining order prohibiting the district from selling the site to another buyer, as well as a lawsuit filed by the city seeking to force the district to sell the site to the city.

City Atty. Stanley Remelmeyer said he will look into the matter to determine if, indeed, the court order and the city lawsuit would be invalidated.