Land Deal Yields No Land, No Deal

Photo by Debra DiPaolo

Until recent weeks, the talk had long percolated in the backrooms of the L.A. school district. A land swap involving the Air Force was to trigger a make-over of the central office that could trigger hundreds of millions of dollars in construction and private development. Instead, as district officials disclosed last week, the deal amounted to a big zero, leaving behind nothing but finger pointing in one of the strangest flops to emerge from the district’s now disbanded Planning and Development Office.

The plan was to swap some scenic but underused acreage in San Pedro for a prime downtown parcel that could become, among other possibilities, a new, gleaming, high-rise headquarters for the 700,000-student school system. Then, the district’s old, expansive headquarters, atop a hill overlooking the civic center, could be developed for profit, or possibly sold to the archdiocese, which is building a grand, regional cathedral nearby.

The entire scenario was to be stage-managed by Dominic Shambra, then the director of the planning office on the 11th floor of the IBM building downtown. Shambra, an elementary school principal turned real estate wheeler-dealer, had assembled a team of high-priced consultants to push through experimental projects touted for their ability to bring in revenue to a school system that is always seeking more funding.

The entire episode has been portrayed as something of a farce — opportunity slipped away while school officials were occupied elsewhere. But the fiasco also fits a pattern established by Shambra and his staff, who for close to a decade operated as a largely autonomous unit, pursuing projects that proved costly distractions from the mission of building and operating effective schools, something the district has enough trouble doing already. In the end, as with ventures at the Ambassador Hotel and other locations, tens of thousands of dollars and untold staff time went down the tubes.

Like other district development efforts, the land-swap tale is framed by controversy over the Belmont Learning Complex, which will go down as Shambra’s legacy, and California’s most expensive high school. Although more than 5,000 downtown students will get badly needed classroom space, the $200-million-plus undertaking has shed many of the features that its developers first promoted, while the costs have more than doubled.

The land-swap deal got far less attention, conducted for the most part outside of public view. At its heart was the push to keep open the Los Angeles Air Force Base in El Segundo. Much of the base’s annual budget of $5 billion goes to defense contractors with plants in the vicinity. The base was a possible target for closure, in large measure, said military officials, because its personnel could not find decent, affordable housing in the South Bay.

The school district entered the picture because it owned prime real estate on the hills of San Pedro. The federal government originally deeded the land, some 55 acres, to L.A. Unified for a high school, but school administrators concluded the location was too remote. The land has since been used for a continuation school and storage. The acreage would be worth a fortune if it were ever developed privately, but the district had no plans to do so, and would have encountered stiff community opposition if it had.

Citing public interest, the Air Force requested a long-term lease on the land, but Shambra, acting on the district’s behalf, demanded compensation in return, and Governor Pete Wilson’s office and L.A. Mayor Tom Bradley helped broker a deal, late in 1992, in which the state, as well as the city and county of Los Angeles, would provide a parcel of equal value.

Early on, Shambra and his team began to favor the property now occupied by the state office building at 107 S. Broadway, a stone’s throw from City Hall. This choice proved problematic: The building remains occupied by state workers until they can move to offices elsewhere, and the old structure is filled with asbestos and lead paint that must be removed prior to demolition.

Although the project disappeared from the press and public radar screen, it began to prompt vigorous fighting behind the scenes, particularly as contentiousness over the Belmont complex escalated.

Board member David Tokofsky — a Belmont critic — became incensed over the dearth of information available about the land swap. Behind closed doors, he accused staff members of selecting a site without informing the board of all its options. Board members, he said, not staff, should make the call on a potentially momentous proposal.

Indeed, the land swap was envisioned as triggering some high-stakes dominoes. Shambra, who liked to think big, talked of building a high-rise on the site, with the potential to house the entire school-district central administration. That, in turn, would make the current headquarters available for private development — which could generate millions of dollars. As Shambra’s star rose, his office collected more authority and operated with less direct oversight. The land swap could have been his biggest plum, it seemed, were it not for the storm clouds gathering around his stewardship of Belmont.

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While peppering staff with questions about the swap, a skeptical Tokofsky asked what had happened to other surplus sites available to L.A. Unified. He wanted the board to revisit the staff recommendation, in part by taking a fresh look at an alternative property in East L.A. that was once reserved for a state prison. It was only then, in the summer of 1997, Tokofsky noted in an interview, that board members learned that the district had crossed that particular property off the list half a year earlier.

Shambra, as well as a chief lieutenant, consulting attorney David W. Cartwright, insisted that the prison site was never viable anyway, because of lead contamination in the soil. But critics suggest there may have been more at play in the surrendering of this vacant and available site. It turns out that the city and City Councilman Richard Alatorre, whose district included the prison site, had designs on this property as a target for development. And last spring, the city and the Clinton administration announced a deal in which the feds would help clean up the property as a contribution toward spurring local commerce.

The school district formally renounced its interest in the prison site in December 1996. About the same time, Alatorre eased away from his pointed criticism of the Belmont project. Shambra, in an interview this week, insisted there was no quid pro quo linking the status of the prison site to Alatorre’s position on Belmont.

“I had a conversation with Alatorre after the release of the prison site,” Shambra said in an interview. “He asked me what was going on with it, and I said, ‘We already released it.’” Shambra dismissed Alatorre’s apparent shift of gears on Belmont, characterizing Alatorre’s early criticism as a bone he had to throw to his union supporters. “Alatorre had to cover his bases.”

Neither Alatorre nor his staff returned calls for comment.

By late 1997, two versions of the land swap were emerging in the hallway gossip of district insiders. Shambra and supporters viewed the arrangement as a strategic triumph. His critics, including investigators dispatched by Assemblyman Scott Wildman (D-Glendale), viewed the swap as evidence of questionable back-door dealing, typical of Shambra and his projects, that was likely to leave the district as the loser.

The Air Force, it turns out, abandoned the idea of building on the San Pedro property some time ago. Base officials set the date of their change of heart as February 1997, when they formalized an agreement to build elsewhere. But press accounts from January 1996 — three years ago — note that the Air Force had already applied to take over the White Point naval housing project, which would render the L.A. Unified lease obsolete.

These events were well-documented in the media. At one point the Air Force held a press conference regarding its plans. Public officials took an active role in the negotiations, including Los Angeles City Councilman Rudy Svorinich and Representative Jane Harman (D-Torrance). One public hearing was held at White Point Elementary School, an L.A. Unified campus.

The Air Force, however, never contacted L.A. Unified to cancel its $5-a-year lease, because it had no intention of doing so until its housing was about 60 percent complete at the other site — which hasn’t happened yet. Retaining the option of building on the school-district land gave the military a cudgel to beat back potential community opposition to its White Point project until well past the point of no return.

The school district, said Cartwright, remained in the dark till sometime in October, when state officials informed him that they had just discovered the Air Force’s revised strategy. Evidently, no one had been tracking the military’s moves — not Shambra (who retired a year ago), and not his development consultant Wayne Wedin, who was billing time at $125 an hour for asset planning until his contract was canceled in late 1997. Also notably out of the loop were Cartwright — who was still brokering with the state over terms of the land swap — and school-board member George Kiriyama, who represents the San Pedro area.

For now, all the district gets for its efforts is a chance to distribute blame. Last week, board member Valerie Fields seemed to be looking in the direction of staff or Shambra’s consulting team for responsibility. Shambra did not hesitate to finger Tokofsky, asserting that he had made staff too gun-shy to exercise initiative. He also faulted the school board for waiting too long to select a site. The district would have its land if it had moved faster, he insisted.

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Tokofsky sees it differently: “There’s no excuse for dropping the ball here. I think they were juggling too many special operations without the school board being very cognizant of what was happening.”

For his part, Cartwright said it’s not clear that any move would have made a difference. The state, he noted, could make a case for exiting any land swap that didn’t include the Air Force. He added, “The Air Force simply never told us. If I had seen this, I would have done something. I don’t know what I would have done, but I wouldn’t have let this drag on for so long.”

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