By Michael Goldstein
By Dennis Romero
By Sarah Fenske
By Matthew Mullins
By Patrick Range McDonald
By LA Weekly
By Dennis Romero
By Simone Wilson
"It's rare to find unused land," noted Horton, whose school-board district includes the surrounding neighborhood. "We don't want to take people's homes or established businesses. The Ambassador property has a building on it, but it hasn't been used for anything for a long time. That's why we tried to get it."
Of course, the school district could have readily acquired the site in advance of Trump and his partners, but for years officials failed to pull the trigger on the deal. And once Trump bought in, he was in no mood to be bought out.
Just like Trump, some school-district officials also looked covetously at the Ambassador's much-desired Wilshire frontage, and they hatched speculative development schemes of their own. And just like Trump, the district would take a financial beating in pursuing these goals. One district blueprint allotted the back portion of the site for a school and the front for 1.6 million square feet of retail, including a 30-story office building. The parcel, officials reasoned, could be a source of revenue for the cash-strapped school district. These retail visions would later be transferred, unsuccessfully, to the Belmont Learning Complex.
For years, the only thing rising at the Ambassador was the legal tab. In 1990, the school district initiated condemnation proceedings, asserting its right as a government agency to take the land for a public use. The $48-million deposit was part of this process, a legally required deposit until the land's true value could be determined. Amid intense lobbying from both the district and Trump Wilshire, a key state funding board narrowly sided with LAUSD, committing $50 million of state money to the land purchase, funds that could have sealed the deal.
But then the school district got its chance to buy a similar-sized plot at Belmont for $30 million. In 1993 the state agreed to pick up the tab on the Belmont purchase, but also rescinded its $50 million commitment at the Ambassador. By this time, the real estate market had collapsed, and the Ambassador site was no longer worth even the $48 million deposit. Problem was, the district was obligated to pay Trump Wilshire the property's value on the day of the 1990 condemnation, when real estate was at its priciest. To avoid this cost, the district abandoned the condemnation.
Here the district was taking a calculated gamble. If Trump Wilshire couldn't develop the site in a dead market and also couldn't return the deposit, the school district could win the entire site anyway through foreclosure. This strategy infuriated Trump Wilshire managers, who accused L.A. Unified of trying to steal something it wasn't willing to pay for. Stuck with a property it couldn't develop, Trump Wilshire sued to force L.A. Unified to take the land after all, but pay a premium price for it. No jurist, however, had much sympathy for the brash, out-of-town developer, no matter how much he and his partners might be abused by the school district.
LAUSD always argued that it was acting in the public interest - either to get a school or to save tax dollars - and that logic always carried the day. The litigation took most of the 1990s. Finally in December, an L.A. superior court judge ruled that the school district did not have to complete its purchase of the property.
Now the market - and the equation - has changed again. Trump Wilshire is free to build, but is racing the clock. Sometime soon, it must cut a check for the original $48 million plus interest to LAUSD - or risk losing everything to the school district - unless it can make something happen either in the market or in the political realm.
"We intend to pay the school district back," said developer representative Barbara Res. "But we also intend to develop the property."
One ally for the Trump Wilshire is City Councilman Holden, who represents the Ambassador area. Holden is legendary for his inconsistency, but he's been remarkably unbending on this subject: He wants private development at the Ambassador, not a school.
Former Mayor Tom Bradley also opposed a school at the site; Mayor Richard Riordan won't take sides.
As he has on other issues, Riordan seems prepared to let nature take its course, on the theory perhaps that a hotly contested 23.5 acre site in the heart of the city is not a proper mayor matter. "Information regarding the status of the project or questions should be directed to the involved parties," said Riordan's statement.
For their part, district officials, after some initial panic, insist their position remains strong. "My only guess is that this proposal is a political trial balloon to force the district to settle its lien for 50 cents on the dollar by getting Nate Holden and other stooges to front for them," said one district source off the record.
Added another: "It's completely bizarre. It could be an attempt to see if some investor wants to come to the plate or an attempt at political leverage against the school board."
"No development can proceed until the district's debt is taken care of," said Richard K. Mason, general counsel for L.A Unified. "Our only interest is getting paid back what we're owed."
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