District Stunned to Learn Land Deal Fizzled Years Ago

For five years, Los Angeles school officials nursed a deal that promised to deliver a choice piece of downtown real estate into the district’s hands--for free.

In secret sessions, the Board of Education played a shell game with several possible plums to be plucked in a complex land swap with the governments in Sacramento and Washington. Finally last summer they settled on the seismically outdated state office building at 1st Street and Broadway.

The possibilities were tantalizing: They could build a new district headquarters, for one, or broker the land for a new high school campus somewhere else.

Instead, the windfall has blown right through the district’s hands in the most unbelievable way. The attorney who drafted the agreement sheepishly informed the board in a letter that became public this week that the deal actually fell apart two years ago without the district knowing anything about it.

Dismayed board members are now looking for someone to hold accountable. At a hearing Thursday, board member Valerie Fields pressed district officials for an explanation.

“They act like that’s a rhetorical question,” Fields said. “I think we ought to know who fell down on the job and there have to be repercussions.”

In an interview, district contract counsel David Cartwright, who brokered the deal, said he will take the blame.

“If there’s fault, it’s me,” he said. “I don’t know how the system failed.”

But in his letter to the board, Cartwright hinted at timidity by the U.S. Air Force as a contributing factor, and also sniped at state land officials for taking a “bizarre” legal stance.

The state office building, scheduled to be demolished in a few years because seismic upgrades would cost more than rebuilding, became available to the school district in 1993 as part of a complex land swap plan aimed at retaining an Air Force base in El Segundo.

The base, which is worth an estimated $5 billion annually to the local economy, had been targeted for closure because of chronic housing problems.

“We have had a serious problem that people decline assignments here because the cost of living is so high,” said the base’s counsel, Jon P. Bruinooge.

Gov. Pete Wilson helped broker a plan by which the school district would lease to the Air Force 17 acres it owned in San Pedro in exchange for its pick of surplus state land.

School board members wrestled with the decision over which parcel to take, always discussing the matter secretly under the theory that disclosure of their views could harm the district’s position in the negotiations.

Meanwhile, the Air Force ran into community opposition to building housing on the school board’s San Pedro land. Instead, the Air Force decided to use some property that had been abandoned by the Navy.

Air Force officials informed homeowners near the school district’s land, and City Councilman Rudy Svorinich Jr., of their decision. But they never directly informed the school district or the state, both of which failed to find out on their own.

In his memo, Cartwright said the Air Force avoided telling the state directly because officials were “concerned about a negative reaction from Gov. Wilson,” who presumably would have been angered that the Air Force was spurning the land swap he had arranged.

“We obviously didn’t want to appear to be ungrateful,” Bruinooge told The Times.

But, he added, it should have been obvious to district officials that the Air Force was not building housing on land the district owned.

Apparently, however, district officials did not notice. School board members continued to discuss what they would do with their new building. Had they held those discussions in public, someone outside the district’s own staff might have let school officials know what the Air Force had done. But the board kept its talks secret.

The deal finally unraveled last month as school district officials pressed the state to transfer title.

Kevin Eckery, deputy secretary of the State and Consumer Services Agency, said he made a routine call to the Air Force to ask about the status of the lease, and was surprised to learn the service planned to relinquish it.

State land officials reasoned that since the Air Force no longer needed the school district’s land, the state was no longer obliged to throw its land into the deal.

The district could still purchase the state’s land, Eckery said, but Cartwright rejected that idea.

The district’s intention was to sell the Broadway property, which has been appraised at $17 million.

Cartwright told the board in his Dec. 15 letter that he thinks the district is still owed the state land because the district “performed its obligation” to the Air Force and “it was that act that caused the air base to remain open.”

Privately, though, Cartwright has decided that it is not worth alienating a new governor with a bitter court fight.

He said he will advise the board that a conciliatory posture may gain the district points in future dealings.

“Maybe it sounds like we’re being pushovers on this, but I think the right strategy is not to be pushy,” he said.

The spirit of forgive and forget has yet to move Fields, who sees the whole episode as a waste of time and money.

“We are taking staff time and outside attorney time to discuss an issue that is a dead issue,” Fields said.

“I do not know what we could have done, but certainly you don’t continue talking about finishing a deal when there is no deal.”