BUENA PARK : Developer Sought in School Land Project

Centralia School District is looking for a developer to finish a housing project in La Palma that was halted because the real estate market bottomed out.

More than four years ago the district sold an eight-acre site off La Palma Avenue and Walker Street near Central Park to a developer with plans to build 48 houses, said Paul Burkart, fiscal services director.

But the developer, La Palma Homes Equity, a limited partnership, only built and sold 18 homes.

To get the project completed, the school board this week approved waiving the formal bid process and agreed to find a developer with strong financial backing to buy the 30 lots and construct the remaining homes.

“We’re hoping now that things will move along,” said Trustee Karen Blake. “I hope that we find a new developer and he goes in there and finishes the development.”

The district property had been set aside for a new school site, but a school was never needed, Burkart said.

Burkart said two developers are interested in buying the property.

In the meantime, Burkart said, La Palma Homes Equity defaulted on its promissory note to the district. The district last week began foreclosure proceedings to regain title of the property to sell the 30 lots to another developer.

Burkart said the current market value of the 30 lots is estimated at $3 million to $3.5 million.

The district originally sold the property for $8.2 million but has received only about $3 million, Burkart said. Some of the money was used to help pay for the building costs of the new Centralia School in Anaheim, which opened this school year.

But Burkart said because the housing development wasn’t completed, the district has lost out on expected income, because the value of the property dropped in five years.

The money from the project was earmarked to make improvements to the district’s schools in Buena Park, Anaheim and La Palma.