Cost of New Schools Headquarters Could Soar, Report Claims

The downtown high-rise that the Los Angeles Unified School District has bought for its new headquarters may be so structurally unsound that repair costs could reach $60 million, the district’s internal auditor said in a confidential report Tuesday.

Inspector General Don Mullinax raised concerns about the 29-story building, saying some floors are uneven and too weak to support file cabinets and other heavy equipment.

“Do we want to purchase a building where every time we want to add [a] cabinet, bookcase, private office or a desk, we have to consult with an engineer to see if the floor can handle the load?” Mullinax asked in the report.

District officials said they are aware of the structural deficiencies but insisted that the problems are cosmetic and can be corrected without major expense.

“We knew the building had uneven floors when the [school] board voted for it,” said board President Caprice Young. “We knew from the beginning that this was a cheap, ugly building. [But] I’m satisfied the district got a good deal.”

Mullinax said an independent structural engineer estimated that reinforcing the floors could cost as much as $2 million apiece. That could add nearly $60 million to the $74.5-million price tag for the building on Beaudry Street, a few blocks from the unfinished Belmont Learning Complex.

The school district wants to move into the high-rise and use its current headquarters on Grand Avenue for a new high school.

District officials, citing the conclusions of numerous engineers, called the building structurally sound and safe. At a hearing Tuesday night, Supt. Roy Romer expressed frustration over the possibility that the dispute could delay the move.

“What is it you feel you need to further investigate?” Romer asked Mullinax. “I would assume that you would not presume to make an engineering judgment. To delay this another week for another set of real estate experts to make judgments, that is not the way to build schools.”

Romer made his comments as the school board debated whether to issue $180 million in bonds to fund the purchase of the Beaudry Street building, which would house workers from six district offices in the downtown area. The school board delayed a decision on the bonds until Friday.

That amount includes an estimated $15 million in improvements, plus costs such as relocation.

School district attorneys and consultants drafted more than 30 pages of answers to questions raised by Mullinax in his report.

One of the consultants, Anthony Mason, said: “The floors don’t need strengthening. There’s not a structural problem.”

Mullinax also questioned the methods used by district officials to derive the value of the property and whether they got a good deal. But school district lawyers and Romer defended the purchase price, saying it was less than the appraised value of $80 million.

“Is it a good buy? Yes,” Romer said. “Is it safe? Yes. It works for us.”

But at least one school board member said buying the building was a bad idea.

“I think this building, for numerous reasons, is a lemon,” said David Tokofsky, the only one to vote in July against buying the property. “I don’t know what logic ultimately drove us there when there are places that are even larger and cheaper per square foot.”

The Beaudry building has been occupied primarily by Security Pacific Bank and Bank of America since its completion in 1982. The school district already has agreed to lease the 935,000-square-foot building through the end of 2005. It also has agreed to buy it.

At least two downtown commercial real estate brokers panned the structure. One called it a “horribly built building.”

Another, Robert Maguire, whose Maguire Partners is the largest landowner downtown, wrote Romer a letter Monday outlining the building’s many problems. He criticized the structural design as “marginal,” describing the cavernous space inside as a “dark, unpleasant office environment.”

“The building has been viewed almost with amusement for years,” Maguire said in an interview.

“The deal would hurt LAUSD’s credibility at a time when they don’t need it,” he added. “All of us want to see LAUSD succeed. They don’t need a deal that would be viewed by people in the industry as questionable.”