Trump Takes School Cash Deposited for Hotel Site : Education: Court will decide whether district’s $48 million is a fair price for 17 acres of Ambassador location it is trying to condemn to build classrooms.

The high-stakes fight over the Ambassador Hotel site took another turn Friday when developer Donald Trump and his partners decided to take the nearly $48 million the Los Angeles school board had deposited as part of its condemnation suit over the property.

In taking the money, Trump Wilshire Associates is, in effect, dropping its claim that the Los Angeles Unified School District does not have the right to take control of the property under its powers of condemnation. The district wants 17 acres of the 23.5-acre site in the bustling Mid-Wilshire area for a new high school. The current owners, including the high-profile New York-based developer, want to build a high-rise office and shopping complex there.

But the outcome of the case will turn on what has been the major issue all along--how much the land is worth and whether the district can afford it. It will be up to the court to resolve that. The case has not yet been scheduled for trial.

“By withdrawing the deposit they concede our right to take the property. From our perspective, that is a major victory,” school district attorney Richard K. Mason said. “It is not a sale, but it is a concession, and now the only issue is how much (the site) is worth.”

Trump said in a prepared statement that “we hate to lose” the property and expressed confidence the court will award “a great deal more” than the $48 million offered by the district.

But a spokeswoman for Trump Wilshire Associates said Friday’s action was “a business decision” based on a desire not to let money the owners are entitled to sit idle. It should not be construed as a signal the group is throwing in the towel on its development plan for the site, said the spokeswoman, Barbara Res.

“Right now it is on hold” until the court decides what the proper sales price should be, Res said.

She said the decision to take the money had nothing to do with Trump’s recent financial problems. Trump has only a 20% stake in the Ambassador development group, she said.

Kevin Brogan, an attorney for Trump Wilshire Associates, said the group is “absolutely” committed to its fight to keep the property. Withdrawing the school district’s deposit simply means “that value is the only issue now, as (is the case) in 99% of all condemnation cases.”

Rita J. Miller, another attorney for the investors, said she believes the court will put a value on the land that will put it beyond the reach of the financially strapped school district.

“Trump Wilshire Associates is confident the decision will be in the neighborhood of $200 million. It would be totally irresponsible for the Los Angeles Unified School District to pay that amount for a school site. . . . We are confident (the district) will allow the property to remain in the hands of (the current owners),” Miller said.

Under state law, public agencies can take needed private property, provided they pay fair market value for it.

When it began condemnation proceedings last summer, the district put up the $48 million to “freeze” the value of the land. The jury that decides the value of the property will base that decision on the worth of the land at the time of the deposit.