Simi Valley Unified School District is nearing the end of a four-year effort to shed long-vacant, unnecessary or undersized properties, and as a result the city stands to benefit from new housing, jobs and tax revenue. The district in recent years has sold, or is has agreed to sell, at least 34 acres of property including its current headquarters and an empty school. Developers, and an aerospace business relocating from the San Fernando Valley, have lined up to buy the parcels and several deals are in escrow awaiting city approvals of planned projects. Ron Todo, associate superintendent of business and facilities for the district, and Superintendent Jason Peplinski, oversaw the complicated trades to finally reach the goal last month of purchasing the district’s new headquarters. “It has taken patience,” Todo said. “We will have gone through about six different transactions worth about $34 million. Typically, someone in the business of schools won’t even encounter this experience.” Falling enrollment Student enrollment has fallen about 26 percent at Simi Valley Unified to a current population of about 17,000 children since its last uptick 15 years ago. That prompted the district to vacate properties and sell them off. It is selling Belwood Elementary School, which had sat vacant for decades on a 10-acre parcel on Kadota Street, to Westlake Village developer Darling Development Group. Forty-eight homes will be built there. In another transaction, the district sold a training facility on 5 acres on East Country Club Drive in the Wood Ranch area. Nearly 40 condominiums are under construction there. “The way Simi Valley schools were built – it was during a strong era of growth,” Todo said, referring to the 1960s and 1970s. “After that was declining enrollment.” The activity motivated the district and Board of Education to sell enough unused and aging properties so they could buy a new headquarters building and replace their existing one, which no longer fits Simi Valley Unified’s 120 employees. At 60,000 square feet, the aging building at 875 E. Cochran St. houses several departments. The district has had to convert lobby space into offices, move overflow staff into portable offices outside and shift employees to other buildings. “It’s like you’re walking into a maze,” Todo said. “There’s no reception area, it’s hard to find where you’re going, and it’s like walking around in a circle.” The district just closed on the purchase of what will be its new headquarters at 101 W. Cochran St. – a 120,000-square-foot former television production facility built in 1994 with plenty of office space and parking for 338 vehicles for $13.2 million. It was sold by Hollywood entertainment veteran Steve Needleman who owns the Orpheum Theatre in Los Angeles. “We all fit in it, it’s a newer building, there’s very little work needed to move into it,” Peplinski said. Plus, it could also have a community-wide use, he added. Mike Tingus, president of brokerage Lee & Associates – L.A. North/Ventura Inc., headquartered in Sherman Oaks, negotiated the transactions on behalf of the school district, along with Grant Fulkerson of Lee & Associates and Joel Kirschenstein, president of Sage Realty Group in Westlake Village. He said public school districts face mounting competition for enrollment from home schooling and charter and private schools. “At the end of the day, they’re going to find enrollments not quite as high,” he noted. While the district is putting other properties up for sale, the majority of the $10.3 million needed to pay for the new headquarters will come when it sells the current headquarters building and land. Parcelization Three potential buyers of the district’s 13-acre headquarters site are waiting for the city to approve the district’s plan to break the property into four parcels so it can sell them individually. The buyers are also waiting for the city’s nod of approval on their proposed development concepts before they agree to finalize a purchase. Simi Valley Unified’s property disposal will result in a greater amount of taxable properties coming onto the tax roll, which will have an overall positive impact, said Brian Gabler, Simi Valley’s assistant city manager. “Moving their property to job-producing will be good for us,” Gabler said. Darling Development was one of the first to scoop up the district’s surplus property. It was the permanent buyer of the former Belwood Elementary School site in early 2016 and entitled it for the 48 homes. That deal is soon to close. Owner Dick Darling is also one of the potential buyers of one of the pieces of the district’s headquarters land. His portion is a 5.3-acre parcel which includes the 25,000-square-foot education services building and other buildings he hopes to buy for $3.5 million. He plans to raze the structures and develop 20 to 25 industrial condominiums ranging from 1,500 square feet to 12,000 square feet. While the condos scenario is not definitive, industrial space is, Darling said. “Improvement in the business climate makes industrial development very promising,” he explained, “and the vacancy factor in Ventura County in industrial space is very low. In Simi/Moorpark it’s around 3 to 4 percent. It’s one of those market segments that’s quite strong.” He plans to submit an application to the city soon, he added. With less than 1 percent industrial space available in Simi Valley, Darling’s project is what the city needs, Gabler said. “If Mr. Darling wants to build industrial condos or an individual building, we would look forward to that project to provide more industrial space in our community,” Gabler said. Another slice of the property, about 3.5 acres that holds a 24,000-square-foot building, will likely become the new home of Electronic Source Co. The company makes electronic components for aerospace and defense contractors, and is in escrow to buy the property for $4.2 million. President Scott Alyn has asked the school district to divide the parcel yet again. The building is 110 percent larger than Electronic Source’s current Van Nuys facility, and the company needs more space to fit a 15 percent growth in staff. It grew 45 percent last year in revenue and Alyn expects another 30 percent this year. “That’s what’s driving our move,” he explained. Another factor Alyn added was Simi Valley’s lower business tax compared to Los Angeles. The third portion of the district’s headquarters’ land is set to be sold to hotel developer Fine Hospitality Group of Brea, which hopes to buy the nearly 4-acre plot for $2.6 million. Ken Pansuria, chief executive, envisions building a hybrid of two Hilton Worldwide Holdings Inc. brands – Hampton and Home2 Suites – with a total of 200 regular and extended-stay rooms. Simi has no Hilton hotel, so the brand’s loyal guests go elsewhere, Pansuria explained. “There is a different kind of demand in the city – from business travelers, people visiting the Ronald Reagan Presidential Library, attending weddings and visiting for sports events,” he said. Pansuria is also confident in the city’s occupancy rate, which he says is 80 percent. But Fine Hospitality has to get in line behind two other proejcts farther along in the city’s approval process. L.A. developer Rising Realty Partners’ zone change request and conceptual plans to build a Hyatt Hotels Corp. Hyatt Place with 100 to 125 rooms as part of a larger project were just approved by the Simi Valley City Council. And a 104-room hotel on Cochran Street near Sycamore Drive was approved several years ago and developers are submitting drawings, according to Gabler. Whether Simi Valley needs three more hotels is a “major question,” Gabler said. Pansuria’s company will likely have a market study done on the potential demand for its hotel and impact on area existing and imminent hotels, Gabler said. “We would be interested in seeing the report, because we would want to know that before we go down that path,” he said. On the other hand, adding a Hilton to the existing Courtyard by Marriott International and the new Hyatt could also help Simi Valley, Gabler explained, by capturing dollars of loyalty program members and revenue from the10 percent bed tax. “When you add that diversity, that hopefully increases the room nights in the community as well as the number of travelers that will stay in the community,” Gabler said.
