City Council backs concept to sell Anthony Office Building to LAUSD for school use with DWP leaseback

The Los Angeles City Council on Aug. 3 approved the concept of a sale and leaseback of the Anthony Office Building in the San Fernando Valley to the Los Angeles Unified School District for conversion to a high school, while allowing the Department of Water and Power to lease back some space.

City staff told the council the purchase price on the table is $50,000,000 and the transaction would permit the Department of Water and Power (DWP) to lease back the building’s water lab, call center and “a little bit more” for up to 20 years (an initial 10-year term with two five-year extensions), with the lease including the ability to cancel within a year. “What you have before you is a purchase, slash lease agreement with the LA Unified and the Department of Water and Power, for the Anthony Office Building in the San Fernando Valley,” a staff presenter said. “The terms of the agreement essentially are $50,000,000 for the purchase, which, the department is determined to be the market value.”

The council’s approval was for the business concept; Padilla and staff said a required ordinance and additional legal steps would be scheduled for the following week to complete the transaction in a legally compliant fashion. “There is an ordinance that we'll have to follow, this, and we'll need to schedule that for next week to consummate the deal in a, totally legal fashion,” staff said.

Supporters on the council framed the proposal as a partnership intended to relieve LAUSD overcrowding without displacing residents or businesses. Council President Alex Padilla urged colleagues to support the concept but stressed the need to “work through the details” so the deal is “a win for the city, a win for the school district, but most importantly, that it's a win for the children who need classroom seats.” Councilmember Wax, whose district contains the building, said the transaction would reuse an underutilized DWP facility and noted that the project could add seats without demolishing housing or relocating residents.

Councilmember Janice Hahn said the school district told the council it needs 200,000 additional seats to return to two-semester scheduling; she said the Anthony building would provide roughly 800 immediate seats, about 1,200 seats in two years and could ultimately provide up to 2,500 seats. Hahn also suggested the water lab could be integrated into educational programming.

Councilmembers and staff indicated they would continue negotiating specifics such as maintenance, co-location issues and terms of the leaseback before the ordinance comes back to the council. The council adopted the remaining recommendations associated with the item and recorded a 13-0 vote in favor of moving the proposal forward, with the implementing ordinance to return to the council at a later date for formal enactment.

Next steps: staff will prepare the implementing ordinance and final transaction documents for council consideration at the scheduled follow-up meeting.