Tustin Will Pay to End Dispute With Schools

Tustin has agreed to pay Santa Ana schools $60 million by Dec. 27, closing the book on a protracted land dispute that threatened redevelopment of the former Tustin Marine Corps Air Station and jeopardized funding for new campuses in the overcrowded district.

Most of the money will go to speed construction of a 2,500-student high school in the rapidly growing southwest area of the city, Santa Ana Unified School District officials said.

The decision also means Tustin will be free to zone the 1,600-acre former helicopter base for commercial and residential use, a step that has been delayed by the legal tussle.

“This will put the dispute behind us,” said Tustin Councilman Jeffery M. Thomas, who with his colleagues voted unanimously Monday night to approve the deal.

Santa Ana school officials Tuesday praised the decision, which will provide immediate funding for the future Segerstrom High School on 38 acres of the old Armstrong Ranch at MacArthur Boulevard and Raitt Street.

Construction Money

Santa Ana Unified, which bought the land this year, was scrambling to find money to build the school.

Critics have complained about the slow pace of school construction in the district, which passed a $145-million bond measure in 1999. The district has qualified for an additional $127 million in state matching funds for new schools.

The Segerstrom campus could cost as much as $100 million, and about half that amount will come from state matching funds, district officials said. Any remaining Tustin settlement money would go toward other school construction projects.

District officials are eager to start work on the high school, which could open as soon as 2005. With November’s passage of Proposition 47, the $13-billion statewide school construction bond measure, demand and fees for school construction services are expected to rise quickly.

“We really need to start building some new schools soon,” said Margie Brown, the district’s director of facilities planning.

Officials on both sides said Tuesday they hoped this is the final chapter in the eight-year legal battle over the Tustin base, which closed in 1999.

When the federal government announced plans to close bases nearly a decade ago, it pledged that local agencies, including school districts, would benefit from the land windfall. But under plans drafted by Tustin, which was charged with converting the helicopter station to civilian use, Santa Ana Unified was left without land. It sued.

The parties appeared to have settled their differences last May, when Tustin agreed to pay $60 million in two installments next year if the district forfeited its claim to base land.

The parties returned to court in November when Santa Ana rejected the form of collateral Tustin wanted to use to pay its pledge. The school district wanted a letter of credit it could convert easily to a bank loan and immediate cash for school construction. The city offered a deed of trust on about 100 acres of base land, which school officials said would complicate and delay their efforts to secure a loan.

A judge barred Tustin from zoning the base until the matter was resolved.

‘Very Pleased’

Since then, the city negotiated a loan of its own from investment banking firm Salomon Smith Barney and now will pay Santa Ana Unified the $60 million ahead of schedule, both parties said Tuesday. The money is to be deposited in an escrow account by Dec. 27, when the district has agreed to ask the judge to lift the zoning ban.

“We are very pleased,” said attorney Edmond M. Connor, whose firm represents the school district. “We’ve been polishing our dancing shoes to celebrate.”

Tustin City Manager William A. Huston conceded that dealings with the school district “have been acrimonious” over the years. “Sometimes these things have to work their course,” he said.