ANAHEIM : Pact for Apartments on School Site Near

In what could be the first of many similar deals in Orange County, the Centralia School District is close to an agreement with a developer to construct an apartment complex on part of a new school site and use some of the apartment revenue to pay the school’s operating expenses.

Under the agreement, expected to be finalized within weeks, ARV Affordable Housing Inc. of Costa Mesa will begin building a low-income complex for senior citizens next spring on three acres of the school site, near the intersection of Western Avenue and Lincoln Boulevard, and open it by early 1993. ARV would lease the property under the 40-year agreement.

Construction of the $5.6-million school would begin in late 1992 on the remaining 10 acres of the 13-acre site, and it would open in September, 1993, said Steve Bolman, the district’s director of fiscal services.

The district’s share of the 135-unit complex’s revenue, estimated at $271,000 the first year, would be used to defray the cost of operating the new school and to help repair the district’s eight existing campuses, he said.

“This is a win-win-win situation for the school district, the kids and the seniors,” said Jerry Buchanan, president of Centralia’s Board of Education. “The district gets a school and the kids will benefit from having a group of seniors next door. We think we’ll get a group of 10 or 12 volunteers from there who will be coming over to read with the children. And the seniors get affordable housing.”

The agreement has received City Council and school board approval, and will be finalized after ARV obtains financing, Bolman and ARV officials said.

California and county education officials say such agreements between local districts and developers will become common in the future as state revenue for operating and constructing schools becomes more scarce and districts seek alternative sources of money.

“It’s a great deal if you can pull it off,” said Robert Ours, director of facilities and planning at the county Department of Education. “By leasing, a district doesn’t lose its property and it starts an income flow to help pay for the school.”

Under Centralia’s agreement, the district would receive a base annual rent of $131,000 from ARV, plus 5% of the complex’s gross revenue. Since the property will continue to be owned by the school district, it will be exempt from property taxes. ARV will calculate how much it would have paid in property taxes and give half of that amount to the district.

The district is anticipating that the agreement will generate $271,000 for the schools in its first year of operation and $283,170 in its second, Bolman said.

“And we anticipate that amount will go up over the years as the rents increase,” Bolman said. “This is a conservative estimate.”

The money for building the school is coming from Centralia’s recent $8.2-million sale of a La Palma lot that Bolman said was not conducive to school construction. The revenue from the apartments will be used partly to pay the salaries of the principal, librarian, janitor, secretary and other new employees.

“But we won’t have to pay for the teachers,” Bolman said. “They are already teaching the children who will attend this school in trailers on the other campuses.”

The school, which will house 600 students, will be built on the site of the old Centralia Elementary School, which was closed in 1980 because of declining enrollment. The 60-year-old building, used in recent years as a trade school and day-care center, will be torn down, except for a multipurpose room and two classroom wings built in 1968, Bolman said.