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When Leasing Makes Sense

January 26, 2003

It's fine to feel sympathy for a businessman whose venture goes broke and for a nonprofit group that can't raise money. But that doesn't mean the taxpayer should pick up the tab for either one.

The Santa Ana Unified School District is considering the use of precious school-bond money to buy a building that was renovated to serve as a charter arts school. The developer bought the building for $3 million, hoping to fix it up as an elementary arts school and sell it to the nonprofit group that operates the charter Orange County High School of the Arts. Now that the building is ready, the arts school lacks the money to buy it.

That's developer Mike Harrah's problem. But he's looking to the Santa Ana school district, which licenses the arts school, to buy the building for a reported $10 million. That's not a lot of money for an elementary school, but this building is a bad investment because it doesn't meet the standards for public-school construction.

Charter schools, which receive state funding but are run independently, can be built to a less-exacting standard. Should the elementary arts charter fail, the district would be stuck. And the state won't match funding for a campus that doesn't meet the higher standards.

The talk of an elementary arts charter possibly failing is more than academic. The respected arts high school draws talented applicants from throughout the county but has generated little interest among Santa Ana students.

The elementary school -- and a similarly planned middle school -- are meant to be feeders that would provide arts training for students who usually cannot afford private dance and piano lessons.

Santa Ana families have shown more interest in preparing their children for futures in business and the professions. They queue up for days to obtain a spot for their children in the district's fundamental schools. The schools are so popular that this month the district set up a lottery system for enrollment.

Complicating the picture is the building's history. Before Harrah bought it, the building belonged to a nonprofit group that had on its board Nativo V. Lopez, who now is a schools trustee. Lopez, who faces a recall vote on unrelated matters, opposes buying the building both for financial reasons and because of the unsavory appearance such a move would have.

A more acceptable solution for the district: Help the charter group lease the building. If the arts charter succeeds, it will add a rich element to the educational mix and ease crowding at other campuses. If the school fails, the district can walk away.

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