Legislative Study Criticizes School District

Los Angeles school officials engaged in a pattern of misrepresentation and conflicts of interest in a wasteful 10-year experiment with private real estate development, a report released Wednesday by a state legislator concludes.

The report, prepared by researchers for the Joint Legislative Audit Committee, said the district’s “inordinate focus on joint ventures,” typified by the Belmont Learning Complex, now under construction downtown, had drained time and resources from the educational needs of students. In fact, it said, “the LAUSD has failed to build a single complete full-service high school since 1971.”

Assemblyman Scott Wildman (D-Los Angeles), chairman of the committee, said the report shows a need for changes in the law to prevent waste in the recently approved state $9.2-billion school construction bond.

Wildman said the report would be submitted to law enforcement agencies, but he would make no prediction as to whether prosecution is likely.

“There may not have been anything illegal done,” Wildman said. “You can waste government money by going to the edge of the law and not violating the law.”

A spokesman for the Los Angeles Unified School District, Brad Sales, criticized Wildman for releasing the report.

“We think it would have been courteous for him to show it to us at the same time he leaked it to the news media, so we could comment more intelligently,” Sales said. “This is a pattern of his.”

Sales said he believes the document repeats allegations that have been made in previous reports by the same researchers and disputed by the district.

The 144-page report includes histories of seven projects--six conducted by the district’s now-disbanded Office of Planning and Development--that sought to combine school construction with private, revenue producing developments.

The Belmont project is being built at a cost expected to exceed $200 million without the commercial component originally planned. A downtown parking garage has generated about $736,623 in revenues for the district, less than half the initial projection. The other four projects have not materialized.

The committee’s researchers painted a picture of high-risk management practices that failed to generate the anticipated commercial income and delayed construction of badly needed facilities.

Dominic Shambra, head of the Office of Planning and Development until he retired in January, called the report a “political hit piece.”

“This thing is fraught with misstatements of fact,” Shambra said.

The report, written at the behest of Wildman, extensively details two alleged conflicts of interest in the Belmont project. One involves the district’s outside attorney on the project, O’Melveny & Myers, which also represents the developer Kajima International. The other concerns the complex role of project architect Ernesto Velazquez, who was at one time involved in the process that selected Kajima and later joined the firm’s team.

In another project, the report concludes that Shambra exaggerated the extent of damage from the 1994 Northridge earthquake to an aging downtown office building owned by the district to clear the way for a joint commercial project.

Shambra called for a grand jury investigation, contending it would disprove all the charges.