New School or Trump Tower for L.A.? Site's Fate Will Hinge on State Board

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By Michael Newman

A California state board this week will help decide whether a prime piece of Los Angeles real estate will be the future site of a new high school or of the world's tallest skyscraper--built by Donald Trump.

On May 23, the State Allocation Board is scheduled to vote on whether to give the Los Angeles Unified School District money to help it buy the site of the Ambassador Hotel. The board, which consists of four lawmakers and one representative each from the state departments of education, general services, and finance, appropriates school construc4tion funds to districts.

A group headed by Mr. Trump owns the hotel, located on Wilshire Boulevard in downtown Los Angeles. An executive in the Trump Organization said the developer is considering erecting a 125-story building on the property.

But district officials have selected the site for a high school that would serve more than 3,000 students, and say the new school is vital for relieving overcrowding in the district.

The dispute between the district and the Trump Organization has been acrimonious. The two parties disagree over use of the property, dispute its worth, and question each other's motives.

And, thus far, attempts at a compromise--such as an alternate site for the school--have failed.

Barbara A. Res, an executive vice president at the Trump Organization, said the developers' group has proposed five alternate sites for high schools in the area. But school officials have rejected all of them.

"I spent lots of money, tons of money, trying to help the school district find alternate sites," she said. "I don't have to do any of this."

Jackie Goldberg, president of the Los Angeles City Board of Education, called the Trump group's proposals "insulting."

"We've been looking for a high-school site in the mid-Wilshire area for six years now," she said. "They threw some proposals together in what, six weeks? I find that obnoxious."

Suddenly Last Summer

The seeds of the dispute were sown last summer, when a group of developers bought the 23.5-acre parcel for $63 million and announced plans for retail, office, and residential space on the plot. Mr. Trump bought a stake in the group--now called Trump-Wilshire Associates--earlier this year.

The school board had announced its plans for the site last July, saying the property was ideally situated for a high school. District officials said the cost of buying the land and building the school would be more than $100 million.

However, a group of local businesses opposed the school district's plan, citing an independent study that said mixed-use development on the property would help revitalize the neighborhood. (See Education Week, Sept. 6, 1989.)

But district officials persisted in their plan to buy the land. More than 4,500 students in the immediate area currently are bused to other schools, according to a district spokesman.

To buy the land, the district would exercise its right of eminent domain, whereby a public agency can claim private property if it proves a legitimate need. A court would decide a fair price for the land.

The district would also need the state's assistance to buy the land. Ms. Goldberg said it has been appraised at $73.5 million, while Ms. Res said the property's value is "substantially, substantially, substantially, substantially more than that." She said she has received offers of $150 million for the land.

Whatever its value, the State Allocation Board probably will not allocate more than $50 million for its purchase, according to Diane I. Kirkham, a special assistant to State Superintendent of Public Instruction Bill Honig and a member of the board.

If the board approves a $50-million allocation, said a lawyer for the district, the school system could look for local sources of revenue to make up the difference, or it could enter into an agreement with a private developer to lease part of the land.

But Ms. Goldberg said the issue before the allocations board is not merely "whether to approve this one site and this one project."

"The issue," she said, "is whether the state is backing away from its commitment to build schools in urban areas, where real estate is expensive."

Vol. 9, Issue 35, Page 4

Published in Print: May 23, 1990, as New School or Trump Tower for L.A.? Site's Fate Will Hinge on State Board
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