High Home Costs Bear Fruit for Schools
Soaring home prices that have frozen most first-time buyers out of the real estate market have produced a surprising windfall for the Ventura Unified School District that could easily pay for new district headquarters.
A bidding frenzy by home builders for a 40-acre lemon orchard in east Ventura is expected to bring the cash-strapped school district $33.5 million -- twice the amount expected when officials put the parcel up for sale last year.
“It came in at double the appraised value, and I’ve never seen that before,” school district consultant Joel Kirschenstein said. “There were at least 10 bidders and three stayed right to the end. That’s about as aggressive as I have ever seen it on a transaction like this.”
The Olson Co. won the old-fashioned real estate auction in December, then signed a purchase agreement and expects to enter escrow within the next month after completing environmental tests on the site. An unspecified environmental problem has been found, but both sides said it is minor and the issue will be resolved.
The Olson Co., a Seal Beach-based development firm, also outbid rivals last year when the district sold a nearby nine-acre parcel for $4.5 million, double its appraised value.
“The bidding was very, very high -- it’s crazy, it’s nuts,” said Paul Dashevsky, director of development for the Olson Co., the largest builder of in-fill urban housing in California. “But with the interest rates as low as they are, and the demand as high as it is, and the supply so far down, this is just the way the market is in Ventura.”
What those factors mean is that home prices are so high that the Olson Co. believes it can turn a tidy profit even after paying $837,500 an acre for the 40-acre parcel just south of California 126 and east of Kimball Road. The site is one of the largest remaining pieces of land in Ventura’s jurisdiction not protected by anti-sprawl laws.
Adding millions of dollars to the value of the school district land, said Assistant Supt. Joe Richards, was the cooperation of Ventura city officials. Before the bids, city officials confirmed the 40 acres carried housing allocations for up to 240 dwellings, taking away much of the political guesswork that often confounds builders who end up with projects smaller than proposed.
“The city was a huge help,” Richards said. “They were partners with the school district.”
The project must still gain city approvals during the next 18 months to complete the sale and prompt annexation of the unincorporated county parcel into the city. But if the project design is acceptable and meets all city requirements, developers can count on building 240 homes.
As the market stands, Dashevsky said, his company expects to sell townhouses for prices in the $300,000s and stand-alone houses for up to $700,000.
Meanwhile, school district officials hope to be moving out of their aging one-story building in downtown Ventura to the former Kinko’s corporate headquarters in west Ventura. They say the combined $38 million for the two east Ventura parcels should more than cover the anticipated costs. Kinko’s bought the two-story facility, constructed about 20 years ago, for about $13 million in 1988.
“We will eventually use this money for the purchase of the Kinko’s building if we can close it,” Richards said. “We’re still in negotiations, and it’s still fragile. It could be finished any day, or it could be months. We’re at a tenuous point right now.”
Richards would not discuss the potential price for the 118,000-square-foot Kinko’s facility, about three times the size of current administrative facilities. But he said millions of dollars should be left after the purchase to rehabilitate school campuses.
The school district is already spending $81 million gained through a bond issue approved in 1997 on capital improvements. It has built two new schools, modernized several others and expects to update all 25 district campuses within two years, Richards said.
“This will help us complete our plan for fixing schools and relocating our district office,” he said.
The school district is working with the city of Ventura on a second project. The city hopes to coordinate construction of 200 to 300 dwellings on the district’s 3.5-acre downtown headquarters site on Santa Clara Street, officials said. The sale of that land will bring in several million dollars more, Richards said.
By law, the real estate proceeds can be used only to buy or renovate school facilities and not to patch holes in a district budget squeezed by a huge state budget shortfall, Richards said.
“This money can only be used for facilities,” he said. “So if people are hearing about the school budget problems, this will not help with that. But it will certainly help with the condition of our schools.”
