FDIC Takes Possession of Pottery Site

The Federal Deposit Insurance Corp. became the formal owner of the site of the old Franciscan ceramics factory last week, after a foreclosure auction failed to draw any bidders.

Tony Ferrulli, head of the FDIC’s real estate division, said the federal agency will have the 45-acre parcel appraised and then put back on the market through a sealed-bid process within two months.

Ferrulli estimated that the property--which is being eyed by Los Angeles city officials as a potential site for a new police academy--would be appraised at $25 million.

At the foreclosure Dec. 9, the FDIC had requested a minimum bid of $19.9 million. Any purchaser would have had to pay the entire amount in cash within 30 days.

But Ferrulli said the agency would be willing to help prospective buyers arrange financing as part of the sealed-bidding process.

“There seems to be a considerable amount of interest” in the property, Ferrulli said. “We continue to get calls about it every day.”

Atwater Village residents have made it clear that they want to see the land used for the new police training facility rather than a private development. But Police Department officials have said they doubt that the city can afford the site. Sgt. Dave Dalton said the department has only a $9-million budget for site acquisition for the project.

Ferrulli said the FDIC “will certainly try to accommodate and work with” city officials if they approach him about buying the land. But, he said, “when we liquidate any asset of a failed institution, we are charged with getting the best price for those assets that we can.”

Dalton said the Police Department’s formal site selection process probably will not be complete in time to make a bid on the land. The City Council must select its preferred site before the department can make an effort to buy it.

The Franciscan site is owned by a subsidiary of Schurgin Development, which intended to build a large shopping center on the property. But the developer was forced into bankruptcy when the discovery of asbestos on the parcel sent the cost of toxic clean-up far above the $6 million estimate.

Crossland Savings--the savings and loan which lent the developer $43 million to purchase and clean up the land--is in the midst of bankruptcy proceedings itself, which is why the FDIC is involved in the matter.