Another Setback for Seller of O.C.’s Public TV Station

The state Supreme Court has refused to hear the appeal of a lower court decision that voided an Orange County community college district’s sale of its PBS TV station to a foundation with close ties to the district.

The high court’s action Thursday is the Coast Community College District’s latest setback in its attempt to justify the sale of its station to the nonprofit KOCE-TV Foundation.

Attorney Milford Dahl, who represents the district, said Friday that its next move would probably be decided at the September board meeting. One option is to appeal to the federal courts, he said.

The KOCE sale has implications beyond Orange County because federal regulations require cable systems throughout Southern California to carry the station.

When the station was put up for sale, the Daystar Television Network, the world’s second-largest televangelist broadcaster, offered $25.1 million cash in 2003 and raised its offer to $40 million the day after the deadline. The district refused to consider the new bid.

The foundation made an offer it said was worth $32 million, with an $8-million down payment and the rest to be paid over time with interest. But when the sale was completed, the payments were to be interest-free for 30 years, and no payments were required for five years. Daystar sued to overturn the deal. A state appeals court twice reversed the sale, valuing the foundation’s offer at between $19 million and $23.5 million and calling the deal “the rankest form of favoritism.” The foundation was once the station’s chief fundraiser and is led by a group of local business and civic leaders.

The appeals court said the district could either keep the station or put it up for bid again. The law requires community college districts to sell assets to “the highest responsible bidder.”

Richard Lloyd Sherman, Daystar’s attorney, did not return calls seeking comment. Texas-based Daystar also has a separate suit against the district for religious discrimination.

Unwinding the deal would not be easy. “This is going to become very complicated,” said Ardelle St. George, the foundation’s attorney.

St. George said the foundation owns a lot of the station’s equipment and wondered if it would be included if KOCE-TV is sold to another buyer.

In addition, she said that the Corp. for Public Broadcasting has given KOCE about $23 million in grants over the years and could demand the money back if the station is sold to a non-PBS affiliate.

The foundation has the station’s broadcast license, and the Federal Communications Commission would have to transfer it back to the college district.

District officials are hoping that a bill introduced by Assemblyman Tom Umberg (D-Anaheim) would allow them to sell the station to the foundation.

Umberg’s bill would change state law to allow the district to accept a lower bid by taking other factors into consideration, such as public interest.

Sherman, Daystar’s attorney, complained that the legislation, drawn up at the district’s request, was an attempt to rewrite the law to legitimize an illegal sale.

District Trustee Jerry M. Patterson, a former congressman who helped write the bill, said the measure had not cleared committees in the Assembly and Senate.

He said time is running out, because this year’s legislative session ends at the end of the month.

“Right now it’s still alive, and the legislation is still a possibility. We’re actively working the issue and hope it passes before the Legislature adjourns,” he said.