Fountain Valley School District is wrapping up several years of selling closed school sites,deals that will bring the school district about $88 million.
The sales haven’t come easy for the district, which has seen big homebuilders bid for the land and then pull out amid the slow housing market. But infill housing projects by smaller developers continue to foster interest in the school’s excess land.
Money raised from the sale of four sites will go toward funding an endowment to pay for student programs and teacher salaries, according to Barry Blade, assistant superintendent for business services at the Fountain Valley district.
The big homebuilders have looked at the sites, but the pullback in building plans has left the city seeking out other buyers.
The most recent sale includes two sites, one about 12.4 acres and the other 8.3 acres. Homebuilder Centex Corp. once eyed the sites.
Centex had said it would buy the parcels,technically in Huntington Beach but owned by the Fountain Valley district,for $58 million. But Centex never closed on the buys.
Now the sites are being sold for a third less of the original asking price to Ranco Huntington Investments LLC, a partnership of Ranco Realty Group of Temecula and Huntington Land Development LLC of Newport Beach.
Developer Randy Blanchard of Ranco and Huntington Land Development President Tom Williams are paying about $40 million for the former Lamb and Wardlow school sites.
Ranco Huntington is in escrow on the land. The company’s early plans call for about 100 homes in the 2,600-square-foot to 3,300-square-foot range that could sell for more than $1 million, Williams said.
He said grading could begin in 2010 or 2011,residential zoning for the site isn’t in place yet.
The homes would be similar to a country French design that Williams built at Alta Vista Country Club in Placentia.
“We sold 102 homes in five and a half hours of sales time” there, Williams said.
Williams also has sold homes in Palm Springs and Shafter, in Kern County, under the Saddleback Southwest Homes name.
He and Blanchard have been partners on many deals, he said. The location drew them to this one, according to Williams.
“Randy and I started our careers in this area 35 years ago,” he said.
With virtually no land available here, 20 acres of closed school property looked good, he said.
Another school site, the former Nieblas Elementary at 9300 Gardenia Ave., also sold for a lower price, $19.5 million, even though it was appraised at $23 million. The lot had been vacant for about 15 years.
At one time it was set to be sold to Brookfield Southland Holding LLC, part of Del Mar-based Brookfield Homes Corp. Brookfield thought it might be able to build 60 to 65 homes there.
Fountain Valley also wanted a 1 acre park at the site. That’s when Far West Industries, a privately held builder in Santa Ana, stepped in and bought it.
Far West Industries is grading 14 acres for 54 homes, the company’s first OC housing development, dubbed San Marino.
Scott Lissoy, Far West senior vice president and part of the family that owns the company, grew up in Fountain Valley. His mother was a schoolteacher there.
“I’m very familiar with this city,” he said. “We knew the area and we liked that it was infill in central Orange County. With public homebuilders pulling back, it gave us an opportunity to come in.”
Homes at San Marino will be one to two stories, 3,000 to 3,850 square feet, starting at just less than $1 million.
Far West has built in Palm Springs, Yucaipa, Cathedral City, Rancho Mirage and Riverside.
The principals have made other deals here.
Acting as Palm Springs Village 309 LLC, they bought 1401 Dove St., an office building in Newport Beach. The Lissoys also bought another commercial building on Pullman Street in Santa Ana.
Los Angeles-based KB Home should be watching Far West’s progress. KB Home earlier bought a school site just two miles south of the former Nieblas elementary and is planning a similar housing project.
In 2005, KB paid $24.7 million for the former McDowell Elementary School, at 17210 Oak St., in an area bounded by the San Diego (I-405) Freeway, Warner Avenue, Slater Avenue and Magnolia Street.
As housing sales slowed, observers said KB Home shopped the site but found no takers.
The homebuilder recently told Fountain Valley’s planning department it plans to begin grading in January, according to Robert Franklin, city planner.
KB Home’s plans include 54 single-family homes of about 3,000 to 3,800 square feet each. The parcel is about the same,13 acres,with a 1 acre park.
Franklin also noted the recent trend of building for Asian families,a big part of the population in Fountain Valley,with designs such as a bedroom on the ground floor for grandparents.
KB Home’s plans are ready to roll anytime, Franklin said.
“They don’t need any other approvals,” Franklin said. “They just have to pay fees.”
Other school districts have sold off schools. But they risk losing land they could end up needing later.
Take the Orange Unified School District. It sold Peralta Junior High several years ago. It’s now a commercial sports complex and golf driving range. But a nearby middle school, Cerro Villa, is crowded, according to observers.
Fountain Valley didn’t have this issue.
Enrollment in the Fountain Valley School District declined from 12,000 students in 1974 to 6,000 students in 1988, and has stayed at that level for 20 years, Blade said.
“With the exception of small infill projects like these, there is virtually no developable land for building,” he said.
So families with children aren’t likely to move into the district.
“A hundred homes isn’t going to tip the scales either way,” Blade said.
