Sites worth about $60M

An appraiser told the Huntington Beach City School District board this week that its four closed school sites were worth about $60 million, but would have been worth more before a sub-prime mortgage meltdown sent the real estate market into decline.

“My conclusion is that it’s significantly lower than it would have been 12, 18, 24 months ago,” said appraiser Rick Donahue of Integra Realty Resources. “Very clearly, land values have declined in the last six to 24 months. Will they come up again in the future? I believe so.”

But an appraisal done in 2006 by California Financial Services had values much lower, board President Celia Jaffe said. She called the new numbers encouraging.

Donahue presented his findings on the value of the closed Gisler, Burke, LeBard and Kettler Elementary school sites to trustees Tuesday, which they had called a major step toward making a decision on the property. In addition to the basic values, he calculated their worth if the city used its rights under the state Naylor Act to buy 30% of any land up for sale at a quarter the price. That move would cut millions out of any site’s value.

His report also valued the market monthly rent of all four sites as $1.65 per square foot — based on size, the property would pull in $600,000 to about $850,000 per year using that figure — but warned that since few for-profit companies rent out closed schools, real rents would be significantly less and hard to predict.

“The likely users are nonprofit users such as churches,” Donahue said. “Those are typically not measured as we would measure market rent. It comes down to negotiating what they can afford to pay.”

The report moves the issues forward so trustees can begin discussing a course of action at a 5:30 p.m. study session Jan. 22, district Supt. Roberta DeLuca said.

“All of that’s going to be coming together in the next meeting,” she said. “The question’s going to be, what are the next steps?”

Residents also had a chance to ask about those issues at two community meetings this week. The board held question-and-answer sessions at Dwyer and Sowers Middle Schools, where residents asked pointed questions on their rationale for possibly selling land. Board members responded that they were trying to be fiscally responsible for the district.

“Twenty years ago our parents were talking about selling our school sites,” resident Sharon Augustine said Monday at the Sowers meeting. “What would have happened if the school district sold then? Would we even be having this meeting today? Where would those funds have gone, and what would you be doing today given that most of those funds would probably be gone?”

Later in the meeting, board member Cathy McGough said selling the land was one of the only ways she could see to pay for important work on schools that remain open, since current rents from two Christian private schools were being used to pay for loans for previous projects.

“We need a tremendous amount of money to be able to fix up a whole bunch of capital projects that we don’t have a source of income for,” she said. “We have to fix up the sites for the existing students now.”