College District to Consider Trading New Headquarters : Education: Official says sale of the building, which has declined 50% in value and has yet to be occupied, might make financial sense. A downtown site is considered.

Two years after buying a mid-Wilshire building for the Los Angeles Community College District’s permanent headquarters, officials of the nine-campus system are considering seeking cheaper office space elsewhere.

Spurred by deteriorating real estate values, the district’s finance chief told a Board of Trustees committee meeting Wednesday that the district may have a chance to cut a better deal by, in effect, trading the still-unoccupied mid-Wilshire building for a site downtown.

Neil Yoneji, vice chancellor for business services, said it will take him about 10 days to assess the tantalizing “inquiries” from would-be landlords that have been flooding his office. But Yoneji reassured apprehensive board members that exploring the alternatives would not further delay the district’s scheduled move next August from its cramped, rented headquarters on West 7th Street downtown.

“It would take about a week and half to see whether there really is a deal out there,” Yoneji said. “If there isn’t, we’re going ahead” with the move to the Wilshire building.

No alternative would be pursued unless several strict terms are met, he added.

The district is scheduled in December to award a $4.2-million contract to renovate the building at 4050 Wilshire Blvd., which Yoneji said has dropped 50% in value since it was purchased in October, 1990, for $12.5 million.

His report is sure to add to the debate that has dogged the district in its 18-year quest for a permanent headquarters. Critics questioned whether the district should be buying administrative offices when it could not afford to make badly needed additions and repairs to its campuses. The location of the Wilshire Boulevard building, chosen after trustees lost hope of building on a district-owned site near Los Angeles City College in Hollywood, also sparked controversy.

But advocates of the purchase argued that it would fulfill a need for central office space and save money in the long run. To help pay for campus repairs, trustees planned to lease out one of the Wilshire Boulevard building’s nine floors.

Delays in planning and renovations--including reinforcement against earthquake damage and removal of asbestos--forced officials to postpone their move, originally scheduled for February, for 18 months; in the meantime, the growing glut of office space has quashed prospects of finding tenants to help foot the bill, Yoneji said.

Meanwhile, the district is paying $1.8 million a year to rent its current offices--about the amount it will cost annually to pay off the recently refinanced debt on the Wilshire building, Yoneji said.

Board President Wallace Knox defended the Wilshire Boulevard purchase as financially sound at the time it was made. But with “the rental market so amazingly bad, we may be able to extract all kinds of benefits” that would have been unheard of two years ago, Knox added.

Saying the district may be able to turn the soft real estate market to its advantage, Yoneji listed several terms and conditions that should be met if the district decides to pursue other sites, including no delay in moving to new quarters and no net financial loss or increased costs to the district. Further, Yoneji said, the leasing arrangements should enable the district to own the building in 20 years, unload its Wilshire building by having the prospective new landlord take over the loan payments and provide some funds to spend on campus repairs.

“It sounds like there’s a Santa Claus out there,” said Trustee Kenneth Washington.

Yoneji said he has begun talks with the owner of a downtown building who has agreed in principle to the conditions outlined. District officials declined to identify the owner or the building, saying they wanted to protect their negotiating position.

Trustees Althea Baker and Patrick Owens were skeptical of the prospective change of buildings. “This may not tell the whole story,” Baker said. “We have quite a history of making mistakes.”