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School Room : L.A. District, Needing Sites and Armed With Cash and Legal Powers, Now Is a Major Player in Real Estate Circles

November 18, 1990|RON GALPERIN | Galperin is a Los Angeles-based free-lance writer

When the Los Angeles Unified School District first announced its plans to acquire the Ambassador Hotel for a high school site, most real estate experts dismissed it as a lark.

After all, they said, the school board was no match for private real estate interests-- almost all of which are opposed to a new school on the 23.5-acre Mid-Wilshire site.

But the district--with a 50-person real estate department, wide powers of eminent domain, plenty of money from the State Allocation Board and lots of strong will--has proven itself a tough contender for the prized property.

The district already controls about 5,500 acres of Los Angeles real estate--worth an estimated $8.5 billion. Since 1985, it has spent $142 million acquiring 561 pieces of property for 16 school sites.

With enrollment on the upswing, an accelerated acquisition and development plan is being implemented. More than a dozen new schools are being considered, and the school district will spend $42 million on property this fiscal year alone.

In short, the school district has become a major player in Los Angeles real estate and in local land-use politics.

Creating new schools has become increasingly difficult for the district and its real estate staff. With most of the landscape already developed in Los Angeles, new school sites, for the most part, are replacing existing commercial and residential uses.

Acquiring land and changing its use has created conflicts between the school district and private property owners. The reputation of some schools as examples of poor urban design and magnets for crime hasn't helped matters. And many owners are angered by the prospect of having to defend their property against the district's eminent domain rights.

To deal with the politics and particulars of real estate management and acquisition, the school district's real estate department staff has tripled in size since 1984, when director Robert J. Niccum took charge.

His office now supervises buying, selling and leasing of a portfolio that includes 411 elementary schools, 72 junior high schools, 49 senior high schools and a collection of other educational and administrative facilities, including a headquarters building on San Pedro Street in downtown's industrial district.

Most notable among the growing number of controversies related to the school district and its real estate department is what the district has designated "Los Angeles New SHS No. 1," otherwise known as the Ambassador Hotel site.

Trump Wilshire Associates owns the 69-year-old landmark and wants to create an office/retail/hotel development akin to New York's Rockefeller Center. The school district wants the site condemned and transformed into a 2,500-student senior high school.

The battle lines over this plan have been drawn amid jousting by a host of consultants, lawyers, brokers, appraisers, neighbors and politicians. The Ambassador's owners say it's a fight between free enterprise and the quixotic forces of bureaucracy. School advocates say it is a battle between brash New Yorker Donald Trump and the children of Los Angeles.

The district has initiated eminent domain proceedings for 17.76-acres at the Ambassador. Trump and his partners can keep the 5.74 acres facing Wilshire Boulevard for whatever private development they can get city approval for, school district officials say.

Trump opposes such a plan. He and his supporters argue that the school should be built elsewhere because what Mid-Wilshire really needs is a revitalized commercial core.

The only sure thing in all of this is that nasty rhetoric will continue as the Trump/school district dispute heads for the courtroom.

Meanwhile, several other Los Angeles property owners are watching with a mixture of fascination and concern. The district's acquisition plans this year don't end with the Ambassador. With the need for more classrooms growing acute, other property owners are facing similar encounters.

Metromedia Co. and S-P Development are trying to talk the district out of its interest in their properties. The two companies control sizable parcels in Hollywood and Central City West, respectively, and both hope to persuade the school district that other sites are better suited for schools.

In Hollywood, the school district is looking at a chunk of land that is now home to Fox Television and KTTV. Metromedia Co. of New Jersey has a long-term lease interest in the 12.5- acre property, and the school district would like five of those acres for an elementary school.

Metromedia originally suggested that the district instead consider the headquarters of DeLuxe Laboratories in Hollywood. That idea was hastily withdrawn, however, by embarrassed Metromedia executives when they realized DeLuxe was owned by Metromedia's tenant, Fox Inc.

The school board then agreed to explore other suggested sites, including the possible acquisition of nearby Dixon Cadillac Co. on Sunset Boulevard or the Hollywood Tropicana nightclub on Western Avenue.

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