FOUNTAIN VALLEY : Housing Projects at 2 School Sites Hit Snag

Proposed housing projects at two surplus school sites must be built in phases in order for the developer to obtain financing, consultants told school trustees this week.

The recommendation to phase the projects was presented Thursday to the Fountain Valley School District board by representatives from a lending institution, a title company and a marketing firm.

Under an agreement with the Tumanjan Development Co., the district would receive 50% of the sales price for the two school sites when Tumanjan obtains construction financing.

But John Necarsulmer, a commercial real estate consultant and broker for the developer, said banks aren’t willing to give any money upfront, which means that the developer has not been able to secure financing for the two sites.

The sales prices are $6.25 million for the Lighthouse Lane site and $5.8 million for the now-closed Bushard Elementary School.

Necarsulmer said if the district built the homes in phases, a lending institution would likely finance the projects, since there would be less risk for the lender.

“They would be six months away from construction if they went to phasing and (the developer) got loan approval,” he said.

Necarsulmer said that by phasing the projects, 12 to 15 homes would be built at a time.

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

“The board is willing to look at their proposal,” said Board President Larry R. Crandall.

Crandall said that the board will weigh the advantages and disadvantages of building the homes in phases.

“Being a business person and logically speaking, I can see that doing the project in phases is the only way to get anything done,” he said.

Meanwhile, Crandall said the district, a limited partner in the projects, is in dire need of the projected profits it could realize from the developments.

Necarsulmer also said that the developer is committed to the project and has spent about $1.5 million for environmental impact reports and architectural fees and $500,000 in deposits with the school district.