MARVIN JOSEPHSON -- Community Commentary

Crest View United members read with great interest the Independent’s

article “Board hears options on Crest View site” (Nov. 18).

The $41-million projected lease income over a 65-year period, as stated

by the Ocean View School District in its Financial Analysis of Crest View

Site, September 1999, is hopeful at best.

First of all, the lease agreement is for 25 years, with the remainder

being an option to renew every five years. If Wal-Mart chooses not to

renew, they don’t have to.

Who can say what will happen in 25 years? Will Wal-Mart do most of its

sales via the Internet, with a no-income, large, empty box being left on

the Crest View site?

This lease is risky at best.

Second, Ocean View will receive the lease income at a trickle, at a

one-to-10-year rate, beginning at $400,000 per year, increasing

incrementally each year, as stated in the analysis. Compare this with the

$35 million they would receive immediately if they sold the property.

How can this be?

What Ocean View does not openly disclose to the public is that if they

sold the Crest View property to a private school, for example, they would

receive about $8 million, the estimated 1999 property value, which would

immediately qualify them for $27 million in Proposition 1A modernization funds. To qualify for these funds, Ocean View must match 20%, or $5.4

million, of this $27 million.

By selling the Crest View site for $8 million, they would immediately

qualify for and receive the $27 million. The grand total to Ocean View:

$8 million plus $27 million, totaling $35 million.

On the other hand, the lease with Wal-Mart, at the one-to-10-year rate of

$400,000 per year, would take more than 12 years to raise the $5.4

million necessary to qualify for the $27 million in Proposition 1A

modernization funds.

This is the plan proposed by Ocean View, as stated in its financial

analysis, Page 15: “OVSD has made a commitment to utilize the revenue

proceeds from the Crest View site and contribute its 20% match of

modernization monies rather than seek a tax bond measure.”

Will funds from Proposition 1A be around 12 years from now? Isn’t it

better to get it now, while you can?

The Ocean View School District’s five-year plan, filed with the State

Allocation Board in February, indicates a backlog of deferred maintenance

projects totaling $23.1 million, as stated in Ocean View’s financial

analysis. By selling the Crest View school site, these projects could be

fully funded, and the school district would have nearly $12 million left

over for investments. Investing the $12 million in a safe vehicle, at a

modest 5% annual return, would bring the district about $600,000 per

year, compared to the $400,000 per year the Wal-Mart lease would bring.

Which makes more sense: to let the money trickle in from a questionable

lease with Wal-Mart, the world’s largest retailer, which will do whatever

it wants, and have these maintenance costs escalate ever higher; or

selling the site and creating a nest egg for our future students?

You do the math.

* MARVIN JOSEPHSON is a Huntington Beach resident and chairman of Crest

View United.