By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
Ex-mayor is out to dump the renegade school-board member who tried to stop a project that benefited his law firm
Only one L.A. school-board member voted against a $107 million high school project put together by the law firm of former Mayor Richard Riordan. And that board member, David Tokofsky, has now been targeted for replacement by Riordan in his latest effort to install ”reform“ candidates of his choice on the school board.
Riordan’s maneuverings to oust Tokofsky burst into the news this month when the L.A. Times reported that Riordan and billionaire philanthropist Eli Broad tried to entice Occidental College president Ted Mitchell to run against Tokofsky. Riordan‘s interests in district affairs also include his law firm’s financial stake in a large school-construction project. A senior attorney at the firm has pitched doing other deals as well. Tokofsky voted unsuccessfully to thwart the first of these projects earlier this year at the site of an old dairy.
The Santee Dairy agreement governs the construction of a new high school just south of downtown. The Los Angeles Unified School District completed its purchase of the site in June. Instead of putting construction of the school out for competitive bidding, however, the school board voted in May -- over Tokofsky‘s dissent -- to let the former landowner build the high school. This developer, New York--based W.P. Carey, was represented in negotiations by Riordan & McKinzie, co-founded by Riordan in 1975. The amount earned by Riordan & McKinzie in the transaction is not clear; lawyer fees on the developer’s side are not subject to public disclosure. But the developer‘s fee for W.P. Carey is $5.5 million, with a potential $2 million bonus for early completion.
It’s impossible to pin Riordan‘s effort to oust Tokofsky on his opposition to the law firm’s business deal. Riordan, and Eli Broad for that matter, seemingly are far too rich to chase after contracts. But Tokofsky‘s independent style and his frequent support of the teachers union have long aggravated Riordan and his allies, and Tokofsky’s rejection of this contract fits right into the pattern. If Riordan, as expected, funds a candidate to oust Tokofsky, his own law firm‘s financial stake is certain to become a campaign issue. At the very least, Riordan’s financial ties to the outcome of a school-board vote threaten to tarnish his reputation as a principled catalyst of local school reform.
The Santee Dairy site sits at the corner of East 23rd and Los Angeles streets, just south of the 10 freeway in downtown Los Angeles. It‘s a find, given that it’s hard to locate 18.52 acres of relatively clean land that you can build on without destroying numerous homes and businesses. The site came into play in early 2000, after the school board voted to cancel the half-finished Belmont Learning Complex project. The former dairy was put forward as one of several options that could make up for the seats lost at Belmont. Later, district officials concluded that L.A. Unified needs both Belmont and the Santee site, and many other sites besides, to house the crush of students.
In September, district officials marked a milestone by busing dignitaries and reporters to two high school groundbreakings in one day -- at Santee and at the former Metromedia complex in Hollywood.
The Santee project is breaking ground in any number of ways, some of which clearly concerned Tokofsky. Notably, the Santee deal incorporates contentious elements of the Belmont Learning Complex contract, including the absence of traditional competitive bidding. And, as at Belmont, the contract is structured so the developer has primary responsibility for delivering the school from start to finish, including environmental review and cleanup. With the Belmont complex, critics blamed this approach for soaring costs. To date, Belmont remains half-finished, several years after its original completion date.
But similar difficulties won‘t arise at the Santee site, say district administrators. For one thing, because of Belmont, state safety officials now oversee environmental issues at all new school sites. And the district has expanded and upgraded its own supervisory staff for managing construction. ”I would not have recommended that we use this process in the past, because the school district was not a capable enough client to manage it,“ said Kathi Littmann, who heads the new-school construction division. ”Now I think the district has the expertise to do it.“
It’s easy to see why Tokofsky would be cautious. He and Julie Korenstein are the only board holdovers from the early days of the Belmont project, and both of them raised objections to the Belmont contract early on. Korenstein abstained on the Santee vote.
And even Littmann‘s own published strategic plan notes that this sort of non-traditional deal can cause delays and tack on development costs ”anywhere from 9 percent to 14 percent.“
”Anytime you do anything outside of design-bid-build,“ said Littmann, ”it requires armies of lawyers to pore over every comma and period.“ But Santee offered a unique opportunity to do something different, she added, because the owner of the site also was a capable developer, and taking advantage of that expertise allowed the district to put more of its management resources elsewhere.