The Orange Unified Board of Trustees agreed to a 90-day escrow extension for the surplus Killefer School property the district is selling to Western States Homes.

Western States bid $5.075 million for the 1.7-acre property in 2014, and hopes to build housing for Chapman University students on it.  Because the Killefer School building, the site of the first desegregated classrooms in California, is listed on the National Register of Historic Places, it must be preserved.  While the builder has agreed to restore the 76-year-old building, it has been unable to come up with a development plan that satisfies the City of Orange Design Review Committee (DRC).

To be profitable, Western States must squeeze a minimum number of student housing units onto the parcel.  It has presented preliminary plans to the DRC four times, with little success.  While the project has shrunk from six stories with 80 units and 354 beds, to five stories with six to seven fewer units and 331 beds, it has yet to conform with the Secretary of the Interior’s Standard for Historic Properties or demonstrate compatibility with the surrounding community. The DRC has consistently objected to the project’s mass, scale and setbacks, with one committee member suggesting that the builder is “asking too much of the site.” 

Small lot gets smaller
Western States’ preliminary plans had included the use of a supplemental 5,280 sq. ft. of surplus OUSD property adjacent to the main site.  The district had considered selling that property, currently a parking lot for Richland Continuation High School, and Western States was prepared to buy it.  That sale was scuttled May 25, when the school board failed to get a supermajority (five) vote on the issue.  The 4-3 vote in favor was not sufficient.

Without that additional parcel, the builder must go back to the drawing board.  Western States principle Doug DeCinces told the board at its June 8 meeting that the company needed the 90-day escrow extension to revamp its site plan before returning to the DRC.  The extension amends the purchase agreement to move the deadline for Western States Housings’ right to extend escrow for 180 days by paying $100,000 or closing escrow.  The new deadline is now Sept. 15, at which time the builder could opt for the predetermined 180-day extension.  

DeCinces said that without the extension, his company would likely “have to pass on the project,” and noted that the next highest bidder offered $1 million less than Western States.  Western States was originally the second highest bidder for the property. The highest bidder, the Olson Company, backed out when the Killefer School was granted federal “historic place” status.

The board voted unanimously to move the deadline from June 15 to September.

On another note, Doug DeCinces was found guilty of 14 counts of insider trading on an unrelated matter, May 17.  He is currently awaiting sentencing, and plans to appeal the verdict.  If his appeal fails, he could face up to 20 years in prison for each count.

Killefer buyer given escrow extension

July 2017