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FOUNTAIN VALLEY : District Revises Development Deal

September 30, 1992|DEBRA CANO

Fountain Valley School District board members have approved amended sales agreements with its joint-venture partner--agreements that will allow the partner to pursue financing for housing projects on two surplus district properties.

Parents and teachers turned out last week to urge the board to finalize the development deal, which is expected to pour much-needed revenues into the financially strapped elementary school district.

One project will include 81 single-family homes on 8.6 acres known as Lighthouse Lane and the former site of the district's offices. On the former nine-acre Bushard Elementary School site in Huntington Beach, 58 single-family homes will be built.

District projections indicate that both projects could result in about $16 million in added revenue to the district, said Marc Ecker, administrative assistant to the superintendent.

Ecker said that in order for the joint-venture partner, Tumanjan Development Co., to secure construction loans, the sales agreements had to be amended to show the new lower appraised market value of the properties.

The district entered into a limited partnership with Tumanjan Development three years ago for the sale and development of the school properties. Since then, the value of the properties has decreased, Ecker said.

The value of the Lighthouse Lane property was estimated at $9.6 million in 1989. But the site's estimated land value today is $6.25 million, Ecker said. The sale price of the Bushard site was $7.2 million, and its current estimated value is $5.8 million, he said.

Ecker said the revised agreements guarantee that the district will receive 50% of the sales price from each property.

In addition, the district is expected to realize profits from the sales of the homes.

If construction loans are secured early next year, construction could start by March, with the first homes available for sale 12 to 15 months later, Ecker said.

Proponents told board members that the housing projects were desperately needed to raise revenues to pay for local education at a time when the district faces cuts in state funding.

"I urge you to make a decision and be united," resident Marge Schneider said. "Sell the property--it's not needed--and get the money in our budget so our students will benefit directly or indirectly."

Others suggested that the board delay the decision to ensure that the district's risk is minimized.

"There's no guarantee how much money we'll get. . . . Are we willing to gamble?" resident Joyce Albright said.

Albright told the board to review the agreements to make sure "it's the best deal we can get."

Board of Trustees President Larry R. Crandall said that there are risks but that the amendments will protect the district's financial interests.

"It's going to benefit the district in the long run--and now is the time to act," Crandall said.

"After all, we're in the business of educating kids, and we can't do that without money," he added. "The state is going to continue to cut back on our monies--and we need to take control of our destiny."

The revised agreements are subject to approval by the developer, district officials said.

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