A Newport Beach housing developer has backed out of a deal to buy surplus property owned by the Fountain Valley School District.
Trustees in October selected Kaufman & Broad-South Coast Inc. as their first choice to buy the vacant John B. Bushard School site for $5.7 million.
But soil studies recently done on the 10-acre property showed that about $1 million in remediation work needs to be done, said John Ryan, senior vice president at Kaufman & Broad.
Ryan said that the property has peat deposits. Soil would have to be imported to the site and compacted before homes could be built.
"We got concerned with the site and essentially bowed out," Ryan said. "The cost and timing of getting the work done on the site were both of concern."
Trustee Larry Crandall has said that the district believes it can come up with a remediation plan that is less expensive.
Crandall added that it is unfortunate the deal fell through. "We thought it was money in the bank . . .," he said. "Am I worried? No. We have 20-some developers who are interested in the property."
Other trustees also expressed disappointment but said that they too are confident the district will find another buyer for the property.
"We couldn't resolve some of the problems they had with the site, and we felt it would be better to look at all the bids again," said trustee Catherine Hacker. "There are lots of people interested in it, and I'm sure someone will make an offer the district will be comfortable with."
Marc Ecker, assistant superintendent for administration and business, said that the district did not enter into a final sales agreement with the developer.
City approvals have already been granted to build 58 single-family homes on the site.