Board OKs Talks on New High School Campus : Education: Officials vote to begin talks with a Japanese contractor for Temple-Beaudry facility. But some criticize firm over alleged scandal abroad and mistreatment of U.S. workers.

After years of contentious debate and financial wrangling, construction of a high school to relieve overcrowding near Downtown has moved a step closer to reality.

The Los Angeles Unified Board of Education voted Monday night to begin negotiations with Japanese construction giant Kajima International, but only after creating an independent review committee to scrutinize lingering concerns about the firm.

The proposed high school campus for the Temple-Beaudry area--the district’s first new full-service high school in more than two decades--would enable thousands of students who are bused to the San Fernando Valley to attend classes closer to home.

The decision to go ahead with negotiations came after an emotionally charged board meeting punctuated by shouting matches as board members aired concerns about Kajima, ranging from its alleged involvement in a bid-rigging scandal to complaints from local labor unions about mistreatment of workers.

Ultimately, the board voted 4 to 0--with three abstentions--to work with Kajima on a design and financing plan for the campus, which has a projected completion date of 1999. The vote does not commit the district to use Kajima, but provides for four months of negotiations aimed at producing a contract proposal.

“Now,” said board member Vicky Castro, who represents the Temple-Beaudry area, “we need to move on and build a school.”

Those who abstained did back a motion by board member David Tokofsky to appoint an outside committee of designers and financial experts, to be paid by the developer, that would advise the board before any contracts are signed.

Kajima was preferred over two other developers because of its design and financing creativity. The public-private venture the firm proposed would include a commercial strip and low-income housing complex that would produce revenue to offset the cost of construction.

But attacks on Kajima have dominated recent board meetings on the issue. Through those protests, the board learned that:

* Kajima is one of 38 Japanese firms set to go on trial in November for allegedly rigging bids on contracts with a U.S. military base in Japan, according to the U.S. Justice Department.

* The company is opposed by labor unions, including United Teachers-Los Angeles, because of a dispute involving working conditions at the New Otani hotel Downtown, in which Kajima holds a controlling interest.

* A potential conflict of interest may exist because the private legal firm representing the district in the high school development deal also represents Kajima.

District counsel Rich Mason defended the use of attorney David Cartwright of O’Melveny & Myers to conduct the district’s negotiations because Cartwright does not directly represent Kajima on any other matters.

But some board members remained unconvinced.

“I’m very disturbed by this,” said member Julie Korenstein. “I feel like every time we go over this project something else gets thrown at us.”

District staff said Kajima was the only company willing to finance construction of a school and a row of storefronts on 35 acres of district-owned property at 1st Street and Beaudry Avenue. The 200 low-income housing units would be built by another firm along the back side of the property.

The project’s price tag would exceed $150 million, but the district would only be responsible for buying or leasing back the high school, at a cost of about $60 million.

The project was nearly derailed last week when state Sen. Richard G. Polanco (D-Los Angeles)--long a critic of the proposed location--prevented Los Angeles Unified from benefiting from a key piece of legislation providing state construction funds to such projects.

Polanco removed the restriction and the bill passed after he received assurances from district officials that they would reopen negotiations to buy the site of the former Ambassador Hotel in Mid-Wilshire.

Six years ago, the district had planned to build its next high school there, but the negotiations ended in litigation after failing to reach a purchase price. Mason said $48 million of the district’s money is tied up in that litigation, but board members said Trump Associates--Donald Trump’s firm, which owns the former hotel--wants at least $20 million more for the property.