The Measure I debate

Dale E. Hoover

* EDITOR’S NOTE: The numbers used in this column were taken from the

following sources: Wal-Mart and Arnel Development leases with Ocean View

School District, Proposition 1A and U.S. Treasury rates.

In the recent televised debate over Measure I, which rezones Ocean View

School District’s Crest View school site back to its original residential

zoning, the proposed plan to build a Wal-Mart on the site was exposed as

a risky giveaway to a Newport Beach developer and Arkansas-based Wal-Mart

stores.

Even though the HBTV-3 editors failed to show their charts on camera, the

Yes on I group explained how expert financial studies show that Ocean

View School District could realize $156million, or more, if they were to

sell the property today. It was disclosed that the opponents of Measure I

have overstated the income from the Wal-Mart lease. The claimed

$68-million figure includes $27 million in state matching funds. So the

lease is worth, at best, $41 million spread over 65 years.

Also highlighted was the risk of dramatically lower income from a

shortened lease. The Wal-Mart deal is not a 65-year lease, as claimed,

but a 25-year lease with optional five-year extensions. Wal-Mart has

abandoned more than 300 stores nationwide, according to the Available

Buildings List published on Wal-Mart’s Web site in February 1999.

According to the court deposition of a Wal-Mart executive, Wal-Mart has

admitted that they have relocated hundreds of stores, and some stores

have been shut down after seven years. (Wal-Mart historical information

as confirmed by Al Norman of Sprawl-busters.com, a Web site dedicated to

helping communities fight megastores and large-scale developments).

Sadly, the Wal-Mart plan alone will not get Ocean View School District

the $27 million in state funds it needs to do school repairs. District

board member Pam Walker stated publicly that, “The district will never

get the whole $27 million from the state.”

That’s true. The Wal-Mart lease provides no up-front money to match state

money, and a loan to get the money would wipe out all net income.

She also said, “We’ll do the repairs a little at a time as we get the

money.”

That’s false. The district won’t get the money. State modernization funds

[from Measure A] will only be available for a year, no longer.

While they may have good intentions, district administrators (under

pressure from certain Huntington Beach council members) have gotten

themselves into an unsound business deal.

In contrast, Yes on I would result in an immediate windfall of $8 million

to $13 million by permitting the sale of the site to ready buyers. The

13-acre site is conservatively valued at $8 million today, and some

appraisers estimate the value as high as $13 million.

The sale of the Crest View site also guarantees that the district

immediately qualifies for $27 million in state matching funds. District

schools will be able to start repairs immediately and proceed on a

fast-track schedule, as quickly as contractors can finish the work.

Meanwhile, the balance of the sale proceeds would be safely invested and

would generate a minimum of $156 million to the Ocean View School

District, including a permanent income stream, far exceeding the value of

the current Wal-Mart deal.

See for yourself what makes more sense for our kids.

Wal-Mart’s Deal:

* $400,000 per year income, partly depends on payments from a Newport

Beach developer.

* $41 million deal gambles on the good-faith efforts of Wal-Mart for 65

years.

* Loss of the $27 million in first-come-first-served state matching

funds.

Yes on I Plan:

* Sale of property produces $8 million to $13 million income to Ocean

View School District immediately.

* Guarantees qualification for all $27 million in state matching funds.

* $156-million low-risk income over 65 years.

* Ensures school repairs begin at once.

* Guarantees a permanent income stream for future needs, with no tax

increases.

The truth is, if Huntington Beach voters really want to save our schools,

with a solid financial plan for the future, a yes vote on Measure I will

do it.

* DALE E. HOOVER is a certified public accountant, a certified management

accountant and is certified in corporate financial management. He has

lived in Huntington Beach for 20 years.