Sulphur Springs Union School District hopes to open a shopping center.
The district shut down a Canyon Country school two years ago. On Tuesday night, the trustees finalized negotiations with a developer who will tear down the old school building and construct a strip shopping center. Pacific Development Group will act as the center’s primary landlord.
District officials hope to make $25 million from the 98,050-square-foot shopping center--christened Canyon Springs Village--over the next 30 years. The district will be paid $250,000 per year by Pacific Development plus 50% of all rent increases at the center during that period of time.
“We’re leasing the property to a developer who then goes out and gives subleases and builds the center,” said Supt. Robert Nolet.
The overall lease agreement with PDG is for 55 years, with terms to be renegotiated after 30 years. The developer is slated to break ground on Canyon Springs Village in the spring.
Leasing school property is a way for districts to make money, but fewer than 10% of California’s nearly 1,000 school districts have chosen to become landlords, said Bill Van Gundy, an officer of the State Allocation Board.
Population shifts over the past 50 years left many districts with underutilized facilities because the schools are not located near areas of recent growth. With no legal limitations on what can be declared surplus property, more districts are exploring their options to sell or lease holdings.
“School districts can use surplus property for revenue generation,” Van Gundy said. “There’s not a lot of it happening, but it’s increasing.”
Apartment complexes, office buildings and even a public garage are now operating on parcels of school property in California with rental income going to school districts, Van Gundy said.
Sulphur Springs closed Soledad Canyon Elementary School at the end of the 1991 academic year amid divided public opinion. More than 300 people signed a petition opposing another strip mall and additional traffic in Canyon Country, while a second petition with a like number of signatures cited the project as a necessary way of making money to provide future classrooms.
Shutting down a school housing 490 students sounds like an odd way to relieve overcrowding, but Sulphur Springs was able to free up the site by passing a $20-million bond measure in June, 1990, and buying nearby Honby Elementary School in 1991 from the Saugus Union School District for $4 million. Honby--now known as Canyon Springs Elementary--has a capacity of 620 students thanks to renovations paid for by the earlier bond.
District officials also stretched the capacity of their other schools.
Pinetree Elementary School opened in September, 1988, with enrollment of 628 students--nearly filling its capacity of 650 and offering Sulphur Springs little breathing room. Enrollment continued to grow, and in July, 1991, Pinetree became the first school in Santa Clarita to operate on a multitrack, year-round schedule.
Staggering student schedules throughout the year has expanded Pinetree’s capacity to 1,000, and enrollment has risen to 870 students for this year.
Sulphur Springs considered leasing property after experiencing a 13% growth rate in both 1989 and 1990, said Kerry Clegg, president of the school board.
Soledad Canyon Elementary School was picked for closure because of its proximity to a busy street--posing a potential danger to students and a higher value as commercial property. The 9.1-acre site is at the intersection of Mandan Street and Luther Drive near Soledad Canyon Road--Santa Clarita’s primary east-west thoroughfare.
“Not only were we able to replace Soledad, but that (shopping center) income stream over the next 30 years will allow the district to provide additional classrooms,” Nolet said.
The stalled economy has already made its mark upon the project, though.
Sulphur Springs originally contracted with Tandam Builders for the shopping center, but switched to Pacific Development in March when the first builder was unable to obtain construction funding. The change did not alter plans for the center, but is believed to have delayed construction by about six months.
The district is scheduled to sign its lease agreement with Pacific Development Group Sept. 14, Nolet said.
According to trustees, Food 4 Less will be an anchor tenant for the center. Blockbuster Video has signed a lease agreement.
McDonald’s Corp. is leasing a 2,250-square-feet island created by the project’s alignment of Luther Drive with Homyr Place.
When the Santa Clarita Planning Commission approved the conditional-use permit for the shopping center in early 1992, it included the stipulation that Luther Drive be realigned with Homyr Place to provide better traffic circulation.
McDonald’s Corp. told Santa Clarita that 60% of the franchise’s business comes from its drive-up window and that it would be less accessible to the public once Luther Drive is realigned. That concern prompted the Santa Clarita City Council to require the school district to negotiate with McDonald’s before considering offers from other fast-food companies for the island.