School District, Tustin Resume Court Battle

Six months after shaking hands to settle a long, bitter dispute over land at the closed Tustin Marine base, Santa Ana Unified School District is taking Tustin back to court, accusing city officials of reneging on terms of a $60-million deal.

A Superior Court judge last week issued a temporary restraining order barring Tustin from making any planning or zoning decisions regarding the 1,600-acre base until a hearing set for Dec. 2, an attorney for the school district said Wednesday.

Under the May settlement agreement, Tustin cannot proceed with plans to redevelop the former helicopter base until both parties are satisfied that all terms have been met.

At issue is how Tustin will guarantee the $60 million it has agreed to pay Santa Ana Unified for settling the district’s claim to portions of the base that lie within its boundaries.

The settlement called for Tustin to provide Santa Ana Unified with a letter of credit, which means a bank would vouch for the city’s financial obligation to the school district, said David J. Hesseltine, one of Santa Ana’s attorneys.

The district could use that letter to secure a loan and get immediate access to about $38 million to build schools. The 62,000-student district, one of the most crowded in the state, has embarked on a major construction program to build several schools and expand and upgrade many others.

Tustin, however, is offering a promissory note and deeds of trust on about 100 acres of base land to back it. Under the agreement, Tustin could use a promissory note if it could not secure a letter of credit. But school district officials allege Tustin has not made an honest effort to obtain a letter of credit. They say it would take the district much longer to secure loans based on deeds of trust whose value is still uncertain.

“Tustin has reneged on what it originally agreed,” said Santa Ana school board President John Palacio, one of the chief negotiators in the May settlement. “They need to honor their commitment.”

Tustin officials did not return calls seeking comment. But City Manager William A. Huston said last month that obtaining a letter of credit would cost the city too much in bank fees given current economic jitters.

Tustin and the Santa Ana school district have been embroiled in the land dispute for eight years.

When the federal government announced the closure of the Tustin Marine base and others in the early 1990s, school districts near the closed bases were to share in the land windfall.

But when Santa Ana Unified and Rancho Santiago Community College District were passed over by Tustin, which is in charge of the base’s redevelopment, they sued in 1994. They also accused Tustin of keeping their schools out because the majority of their students are Latino.

The college district settled in April for 15 acres at the base. Santa Ana Unified settled soon after for $38 million in cash to be paid over 18 months, and an option to build on a 22-acre parcel.

When the land turned out to be too toxic for a campus unless expensive cleanup was undertaken, the district opted last month to take an additional $22 million in cash, which brought the total settlement to $60 million.