BELMONT BORN MIRED IN CONFLICT; AT TIMES, CONTRACT WAS USED AS AMMUNITION FOR UNRELATED FIGHTS.

Byline: Tony Knight Daily News Staff Writer

From the beginning the Belmont Learning Complex has been dogged by controversy and political intrigue.

The school district assembled the 35-acre property in 1994 after buying 24 vacant acres from Shimizu Corp., a Japanese developer whose plan to build an office and housing complex failed in the recession.

The district already owned 11 adjacent acres where it planned to build a junior high school. But now with 35 acres, the plan changed to build a new high school and convert the old Belmont High into a junior high.

Early on, the district encountered pressure from Latino leaders to provide low-cost housing to replace the hundreds of dwellings that Shimizu had demolished. There was also a call to integrate shopping and recreational facilities into the design.

Another problem was the sloping site, which drops nearly 90 feet from its heights to the low point at Beaudry Avenue.

``All the major politicians were out there saying we want housing, we want retail,'' said David Cartwright, the O'Melveny & Myers attorney who handled the negotiations with developer Kajima International. ``If all these politicians tell us we have to do these things or we won't support the school, how are we going to do it?''

By far the most fateful decision made on Belmont was to use an innovative procedure that bypassed the competitive bidding process.

Cartwright and Domenic Shambra, director of the district's Office of Planning and Development, decided to seek a developer that would design and build everything and assume the risks for the nonschool portions of the development.

``If you're a school district, the last thing you want to do is jump in bed with a developer where you share the downside risk of the nonschool components,'' Cartwright said.

The district even had to get new legislation passed to use the so-called ``design-build'' method.

Three developers submitted proposals, Kajima, CRSS/Telacu and Goldrich & Kest, with Kajima's bid far and away the most expensive. Cartwright, Shambra and a panel of consultants chose Kajima, saying its proposal was the only one that could fulfill the Belmont dream.

In September 1995, the school board was scheduled to vote on a staff recommendation to enter into exclusive negotiations with Kajima for a contract. Here was where the fireworks began, and the fate of Belmont became entwined in a long-simmering labor dispute on the other side of downtown.

Kajima International's parent, Kajima Corp., owns 48 percent of East West Development Corp., the owner and operator of the New Otani Hotel in Little Tokyo. The hotel had been the focus of an aggressive but unsuccessful organizing campaign by the Hotel and Restaurant Workers International Union Local 11, which now entered the Belmont fray in opposition to the Kajima deal.

Local 11 officials shocked school board members by revealing that the O'Melveny & Myers law firm - whose lawyers, Cartwright and Lisa Gooden, were key players in the selection of Kajima - represented Kajima Corp. in other development projects elsewhere in the country.

Cartwright said he had revealed the potential conflict to the district's in-house lawyer, Rich Mason, who had waived it, saying the huge national law firm could be trusted to keep the district's business separate.

The board voted 5-2 to enter into contract negotiations with the Japanese developer. Since then, Local 11 has demanded to review every document, opposed every board action and fomented much of the controversy that has dogged the project.