Community Colleges to Sell Offices at a Loss : Education: Board votes to put unrefurbished building on market and lease a headquarters instead.

Looking for short-term savings in a period of shrinking state funding, a sharply divided Los Angeles Community College District board decided Wednesday to dump a building it purchased more than two years ago and lease another site for its headquarters.

In authorizing staff members to negotiate a 20-year lease for a building at 770 Wilshire Blvd., trustees embarked on a course that calls for the sale--at a loss--of a building they bought in December, 1990, but have not refurbished or moved into.

The district paid $12.5 million for the building, at 4050 Wilshire Blvd., but the plunge in the real estate market has lowered the value to no more than about $8 million, officials estimated.

Trustees Althea Baker, Lindsay Conner and Patrick Owens favored sticking with the original site as a better deal in the long run because the district would own the building once it paid the debt over 29 years. Otherwise, they argued, the district would be left with nothing but another nine years of debt once the lease on the other site expired.

But Trustees Wallace Knox, David Lopez-Lee, Julia Li Wu and Kenneth Washington said the lease arrangement would give the district a bargain during the years it needs one most. For several years, at least, the leased site would cost less to occupy than the purchased one, district business officials said.

The owner offered the building rent-free for two years; after that the annual rent would start at $12 per square foot and rise gradually to $25 per square foot. The owner also threw in $3.7 million in remodeling, office furniture and extra parking and offered to pay for security, maintenance and operations for five years.

The vote to switch administration building sites came a few hours after district officials unveiled a plan for steep budget cuts that reflects Gov. Pete Wilson’s proposed funding reductions for the state’s community colleges and assumes some student fee increases.

The proposed budget, which Vice Chancellor Neil Yoneji said is “very preliminary,” contains spending cuts from 5.1% to 11.6% for each of the district’s nine campuses, and a 7% decrease for the district overall.

If approved, the cuts would result in class reductions, faculty and staff layoffs, and a halt to expansion plans on most campuses, district officials said. The action represents the second year of spending cuts in the system, which enrolled 115,000 students last fall.

“There are a lot of forces at work against us,” Chancellor Donald G. Phelps told a Board of Trustees meeting.

To make matters worse, Yoneji said the district has a projected $5.6-million shortfall in its current budget. Trustees will decide how to erase that potential deficit at their next meeting.

In developing the preliminary budget, Yoneji said, he anticipated some sort of increase in student fees. This semester the fees increased from $6 to $10 a unit for undergraduates and from $6 to $50 a unit for those with advanced degrees.

“This is not a worst-case scenario by any means,” he said. “Things could get better. Hopefully, they won’t get any worse.”

Phelps said he does not believe a fee increase “will be discretionary at the local level” but will be decided by the state Legislature.

Conner noted that the governor indicated the decrease in state funding might only be 6.4% if the state’s community college districts choose to increase student fees to $30 a unit for undergraduates and to $150 a unit for students with bachelor’s or advanced degrees.

“The governor is inviting us to increase fees,” Conner said. “This is assuming that no one will leave because of the higher fees, and that is an illogical assumption.”

Enrollment in the district already is down 6% to 7% this year, Phelps said. “We do believe it is in part due to the (tuition) increase to baccalaureate students,” he said.

District officials said Wilson does not see the relationship between the job training that community colleges provide and the economy, noting that the governor proposed a 9% increase in funding for state prisons while cutting community colleges 11.1%.

Hardest hit in the preliminary budget is Pierce College in Woodland Hills, where about 200 acres of land previously used for the school’s dwindling agricultural program must stand unused. Neighbors and City Councilwoman Joy Picus have campaigned for the land to remain as open space.

But, said one district official, “there’s no way they’re going to be able to maintain that property.”

Mission College, still developing after opening a permanent campus two years ago in Sylmar, will feel the pain for the first time.

“We won’t be able to proceed with completing our campus,” President Jack Fujimoto said.

Community College Funding

The preliminary 1993-94 budgets for campuses in the Los Angeles Community College District were announced Wednesday by Vice Chancellor Neil Yoneji.

PROJECTED ALLOCATION ALLOCATION PERCENT INSTITUTION 1992-93 1993-94 CHANGE East L.A. College $19,596,000 $18,485,000 -5.7% L.A. City College $22,633,000 $20,828,000 -8.0% Harbor College $13,775,000 $13,061,000 -5.2% Mission College $8,629,000 $8,103,000 -6.1% Pierce College $24,308,000 $21,494,000 -11.6% Southwest College $9,571,000 $8,850,000 -7.5% Trade-Tech College $22,201,000 $21,062,000 -5.1% Valley College $21,738,000 $20,452,000 -5.9% West L.A. College $12,149,000 $11,378,000 -6.4% Instructional $719,000 $679,000 -5.6% TV Program TOTAL $155,319,000 $144,391,000 -7.0%

Source: Los Angeles Community College District Board of Trustees