Project Scope:  Located in Sacramento, California, the North Natomas Town Center encompasses over 200 acres featuring a community college, city library, regional park, aquatics center, and most importantly, the new, $80 million 2000-student Inderkum High School.  The new Inderkum High School features 72 classrooms, a sports stadium with regulation football field and track, 2 baseball and 2 softball fields, 6 basketball courts, 8 tennis courts, a gymnasium, theater and auditorium, outdoor amphitheater and multipurpose atrium, 14 vocational workshops, a cafeteria with full kitchen, science labs, video studio and photography lab.  In addition, a state-of-the-art extremely innovative energy systems features an underground closed-loop geothermal system and a solar energy system with 150,000 square feet of photovoltaic panels, which collectively provide almost half of the high school’s energy needs.

Lease-Leaseback Proposal:  Brookhurst devised a way the District could both complete all of the needed renovations and modernizations throughout the District while also funding the Inderkum High School project. Pursuant to Article §17406 of the California Education Code, Mr. Baize created a new process for financing schools that set precedence throughout the State. The plan presented to the Board of Education, Superintendent and staff of the District would allow Brookhurst to finance and own the improvements on land leased to the developer by the District, then subsequently lease the facilities back from the developer after completion (known as a “lease-leaseback” development).  This would provide the District the following benefits:

1.  All capital currently held by the District, and most of the funding generated through a successful local general obligation bond, could be used for all of the District’s remaining capital improvement programs rather than going towards the new high school.

2.  With the developer’s dedicated professional staff overseeing the project’s completion, the overworked District facility staff could devote more time to other projects.

3.  The District could demand from the developer a guarantee on performance and completion within a very tight time frame, allowing school opening by the fall semester of 2004.

4.  There would be no construction risks for budget overruns or delay in schedule borne by the District.

The development team included Brookhurst, Turner Construction, and the Eastridge Companies providing an on-site construction manager.  Mr. Baize worked closely with underwriters, bond counsel, District counsel and staff to structure a non-profit leasing and development arrangement to accomplish all of the above benefits, including arranging credit enhancement of the debt that resulted in it receiving a Triple “A” investment rating. Brookhurst procured $66 million in debt issued at an unprecedented low interest rate of 1.6%. The low-cost project financing saved the District many millions of dollars. The project was completed two months ahead of schedule and below budget, with $1.5 million in construction cost savings being rebated back to the District subsequent to completion.

Projects:  Brookhurst was contracted to provide the nation’s second largest school district, Los Angeles Unified School District, real estate site selection, acquisition and development services for 13 high school, middle school and elementary school development projects in the San Fernando Valley community of Los Angeles.  Our work included: assisting the California Department of Education in site selection; real estate valuation and site acquisition negotiations; eminent domain processing; oversight of environmental remediation; document processing for the California  Environmental Quality Act (CEQA); and negotiations of charter school contracts.

Brookhurst Development Corporation is the only firm in California that has financed and developed a public school in full compliance with California lease-leaseback laws (Education Code 17406).   Our unique approach to public school development provides the following benefits:

• Full project funding – BDC pays all construction costs
• BDC guarantees schedule and construction cost – district not liable for change orders
• Lease payments due only upon evidence of completion and certificate of occupancy
• District makes no payments until occupancy; lease up to 40 years
• No penalty for early lease termination
• BDC’s low-cost tax-exempt financing means lowest lease payments obtainable

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