ABANDONING BELMONT COULD COST $100 MILLION.

Byline: Greg Gittrich Staff Writer

Los Angeles school board members will be forced to write off more than $100 million in losses if they abandon construction of the Belmont Learning Center and will face a tough legal battle with contractors if they sue, the Daily News has learned.

A report to the Los Angeles Unified School District board outlining the extent of loss and options for three scenarios for halting construction of the half-completed $200 million project was reviewed by the Daily News.

Officials have refused to release the document, although a public hearing on the fate of the environmentally troubled downtown complex is set for Tuesday.

LAUSD general counsel Richard Mason cited attorney-client privilege in rejecting a Daily News request made under the California Public Records Act. The newspaper continues to contend that the information should be made public. A source allowed the Daily News to review the document, which was compiled by the district's Internal Analysis Unit.

The document proposes three work-stoppage scenarios: Halting all construction for 60 days, halting all construction for 180 days, and halting construction only north of the complex's triple gym and west of the main podium. None of the three options could begin until Aug. 1, the report notes.

The seven-page analysis includes financial estimates for each work-stoppage option, argues the buildings would be of no use to anyone else who might want to buy the land and contends the 35-acre parcel would only sell for $20 million - less than one-third what the district paid for it without site preparation or buildings.

Roger Rasmussen, director of the Independent Analysis Unit, also included the cost to build a similar high school at another location, pegged environmental mitigation costs at $16.5 million and referred to $80 million already spent on construction as ``sunk costs,'' or money that could not be recouped.

While the report included these financial and environmental analyses, district Chief Financial Officer Olonzo Woodfin said in an interview that he did not participate in compiling the information. Woodfin would not comment on the confidential report, but provided an itemized list of money already spent on Belmont, totaling more than $123 million.

If Rasmussen's projected maximum sale price of $20 million holds true, the district would lose at least $103 million on Belmont. That figure does not include potential buyout fees owed the developers or more than $1 million spent on a new round of environmental tests at the site.

Extricating the district from the project could have serious consequences as well, according to a letter obtained by the Daily News. Officials would not release the letter.

Warning of serious financial impacts, Belmont's developers, Temple Beaudry Partners, led by Kajima Urban Development, sent a letter to the district foreshadowing what could become a costly legal battle over who is responsible for environmental problems and cost overruns at the nation's most expensive high school project.

Addressed to David Koch, the district's top administrative officer, the June 13 letter asserted the district had indemnified Temple Beaudry for responsibility for any environmental problems or related construction delays.

``While the LAUSD has often faced withering criticism over the project, Temple Beaudry Partners has consistently declined comment - deferring instead to the school district, the project's owner and decision-maker,'' the letter said.

It concludes with a list of signatures of the company's four partners, topped by Marvin Suomi, president of Kajima.

In the letter, Temple Beaudry lists four points it believes ``should be kept in mind'' before the board votes on the fate of Belmont.

Temple Beaudry will ``not bear any liability or responsibility for any of the environmental concerns that are being expressed by the LAUSD and its consultants concerning Belmont.''

The LAUSD acknowledged that it investigated the environmental and site conditions at Belmont and that Temple Beaudry ``shall not be responsible for delays associated with these conditions, nor . . . incur any liabilities'' related to the conditions.

``The proposed suspensions of the Belmont project will have serious financial impacts on the LAUSD.''

``If the LAUSD elects to suspend the Belmont project additional equitable change orders will be necessary to extend the completion date and recognize the delay and recommencement costs.''

The letter adds: ``The success of this project and the safety of every child who would attend Belmont are - and have always been - of importance to Temple Beaudry Partners. Our reputation is also of utmost importance to us - and we intend to defend it vigorously.''

Temple Beaudry officials declined comment on the letter, referring to it ``as a private communication.''

The school board has scheduled a special public meeting for 2:30 p.m. Tuesday in district headquarters, where the seven-member panel is expected to determine the immediate fate of the project.

School board President Genethia Hayes said in an interview that the district has never contended the developers are responsible for the cost overruns.

``We're in the process of negotiations,'' she added.

It is those negotiations and threatened litigation that prompted Mason, the LAUSD general counsel, to refuse to release the confidential analysis on Belmont presented to the school board last Tuesday, district officials said.

Mason originally claimed the entire document was exempt from state and federal laws overseeing the distribution of public information. He then discussed releasing a redacted version of the report, ``separating out factual information from opinion and analysis.''

By Friday evening, he determined that would not be possible, citing in part the Temple Beaudry letter. ``After a comprehensive review with counsel, we remain of the opinion that the entire document is inextricably privileged and confidential attorney-client and/or attorney work product communication and thereby exempt from disclosure under the Public Records Act,'' Mason wrote to the Daily News.

Mason contended releasing the report would potentially jeopardize the district's legal and financial liability in the event of threatened litigation. The data would give the developers information that could be used against the district, he said.

The June 13 letter from Temple Beaudry reveals the developers provided the district with financial estimates associated with suspending construction at Belmont. Temple Beaudry also helped the district determine what construction could be accomplished before work is halted, the letter notes.

According to district sources, the LAUSD Internal Analysis Unit used the data provided by Temple Beaudry to compile a portion of the confidential report for board members.

Rasmussen, the report's author, did not respond to a request for comment.

A difficult case

Jim Ewert, legal counsel for the California Newspapers Publishers Association, said Mason would have a hard time convincing a judge that the factual data in the report is not public information.

``He must prove his decision to not disclose the entire report clearly outweighs the public interest of full or partial disclosure,'' Ewert said. ``Merely asserting the report is privileged does not cut it at all. He must explain, in a detailed fashion, why the exemptions apply in this case.

``In light of all the controversy around this project, public interest in disclosure is extremely high. To support any argument against disclosing any of the information would require an astronomical amount of evidence. He has not done that.''

Assemblyman Scott Wildman, D-Glendale, who has repeatedly been denied documents related to Belmont from the district, said it is ``standard operating procedure for them to claim clearly public documents'' are privileged.

``There is still a significant attempt to withhold information from the public about what is going on in the district,'' Wildman said. ``It would seem the public would need this information to make informed comments at Tuesday's board meeting. The board needs to hold district employees accountable for matters like this.''

Following Mason's direction, board members refused to release the report.

``We concur with (Mason's) view because he is our legal counsel,'' said Hayes, the board president. ``His job is to give us good, sound advice on the Freedom of Information Act.''

CAPTION(S):

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Chart: Belmont's bottom line