FOUNTAIN VALLEY : School Board Frets Over Project Delays

Because the developer of two housing projects on Fountain Valley School District property can’t get financing, the Board of Trustees is concerned that the projects will fall behind schedule and that sorely needed revenues to the district will be delayed.

“There is reason for concern--they should have gotten construction financing in place,” board President Larry R. Crandall said.

Crandall said banks are reluctant to lend money because of the sluggish economy and depressed home sales. “Nobody’s lending money to anybody,” he said.

As a result of Tumanjan Development Co.’s inability to secure financing, the escrows on the sales of the properties have not yet closed. Under the district’s agreement with the developer, the final day to close the escrows is Feb. 25.

District officials said they had hoped construction on the two projects would begin in March.

Michael Tumanjan, company president, is expected to give a presentation to the Board of Trustees at a special meeting Thursday night on the status of the projects.

“The reason for the meeting is to get an update on where we stand,” Crandall said. “We know they don’t have construction financing and we need to know exactly where they plan on going with this.”

The meeting will begin at 6:30 p.m. in the district’s board room at 17210 Oak St. The public is invited to attend.

The developer plans to build 81 homes on the site of the district’s former offices on Lighthouse Lane and 58 homes on the former Bushard Elementary School site in Huntington Beach. Both projects have received city approvals.

Under the agreement with the developer, the district is to receive 50% of the sales price from each property at the close of the escrows, Crandall said. The Lighthouse Lane property is being sold for $6.25 million and the Bushard Elementary site for $5.8 million.

The district, which is a limited partner in the developments, will also receive a portion of the profits from the sales of the homes. Both projects could net the district a total of about $12 million, district officials said.

Crandall said the district has planned on these projects to bring in much-needed revenues to counter cutbacks in state funding.

“We really need these projects to get the district some funds, because, after all, the future of the district is in the balance,” he said.