Dale E. Hoover
* EDITOR'S NOTE: The numbers used in this column were taken from the
following sources: Wal-Mart and Arnel Development leases with Ocean View
School District, Proposition 1A and U.S. Treasury rates.
In the recent televised debate over Measure I, which rezones Ocean View
School District's Crest View school site back to its original residential
zoning, the proposed plan to build a Wal-Mart on the site was exposed as
a risky giveaway to a Newport Beach developer and Arkansas-based Wal-Mart
stores.
Even though the HBTV-3 editors failed to show their charts on camera, the
Yes on I group explained how expert financial studies show that Ocean
View School District could realize $156million, or more, if they were to
sell the property today. It was disclosed that the opponents of Measure I
have overstated the income from the Wal-Mart lease. The claimed
$68-million figure includes $27 million in state matching funds. So the
lease is worth, at best, $41 million spread over 65 years.
Also highlighted was the risk of dramatically lower income from a
shortened lease. The Wal-Mart deal is not a 65-year lease, as claimed,
but a 25-year lease with optional five-year extensions. Wal-Mart has
abandoned more than 300 stores nationwide, according to the Available
Buildings List published on Wal-Mart's Web site in February 1999.
According to the court deposition of a Wal-Mart executive, Wal-Mart has
admitted that they have relocated hundreds of stores, and some stores
have been shut down after seven years. (Wal-Mart historical information
as confirmed by Al Norman of Sprawl-busters.com, a Web site dedicated to
helping communities fight megastores and large-scale developments).
Sadly, the Wal-Mart plan alone will not get Ocean View School District
the $27 million in state funds it needs to do school repairs. District
board member Pam Walker stated publicly that, "The district will never
get the whole $27 million from the state."
That's true. The Wal-Mart lease provides no up-front money to match state
money, and a loan to get the money would wipe out all net income.
She also said, "We'll do the repairs a little at a time as we get the
money."
That's false. The district won't get the money. State modernization funds
[from Measure A] will only be available for a year, no longer.
While they may have good intentions, district administrators (under
pressure from certain Huntington Beach council members) have gotten
themselves into an unsound business deal.
