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Housing market fallout hits schools, too
| Saturday, May 24 2008 12:00 PM
Last Updated: Tuesday, May 27 2008 7:14 AM
Southwest Bakersfield’s new high school wasn’t supposed to go up in the middle of nowhere.
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This field is east of Independence High School and Old River Road and north of McCutchen Road. Independence was created as the city’s housing market roared in 2004 and 2005.
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But dead and delayed development means Independence High School towers over a knee-high skyline of mostly row crops and empty lots instead of suburban tracts that surround it on paper.
The handsome campus at Old River and McCutchen roads opens doors in August.
Like the Kern High School District’s other new site opening this summer — Mira Monte High School in southeast Bakersfield — Independence was created as the city’s housing market roared in 2004 and 2005.
Both schools are still needed to ease crowding at other sites, district officials say.
But they show Kern’s dramatic real estate boom and bust is affecting more than homeowners, sellers and buyers. Large public projects that require years of planning are also nudged by unpredictable ripples of the fallout.
SCHOOLHOUSE MATH
When the district asked voters to approve a $219 million bond measure in November 2004, they pointed to maps with tens of thousands of new homes choking planners’ desks in city and county offices.
Overcrowded schools would be swamped with an unprecedented enrollment surge, figures at the time showed.
Measure N passed, bringing hopes of four new high schools and upgrades to others.
One new campus has already been crossed off the list as building costs rise and state support dwindles.
Plans for the third have been set aside.
“I think we’ve pushed it off a few years,” said Dennis Scott, the district’s associate superintendent of business.
Final costs for Independence and Mira Monte are higher than first estimated. Each will run about $95 million, Scott said.
Two years ago, the estimate was $80 million to $85 million apiece, newspaper reports indicate — already a leap from a figure “upwards of $50 million” for new school construction tossed out in early 2004 as the district geared up to sell the bond measure to residents.
The homebuilding crunch hasn’t affected construction at the new sites, Scott said, because the district used development fees it had already collected to cover about 11 percent of the project.
The state’s pullback, however, will be harder to cope with.
State officials say they’ll pay half the bill, Scott said, but “the reality is: they get to pick the 50 percent they’re going to fund.”
He expects the state to pitch in about $31 million to $32 million for each of the two new campuses.
EMPTY LOTS
In August 2005, as the housing market peaked, the district bought 60 acres for the Independence site from a developer for about $5.6 million, or roughly $93,300 an acre.
The man behind PB 1 Ventures LLC, Calabasas real estate broker Bryan Troxler, had bought more than 2.8 square miles of farmland — more than 1,840 acres — in a series of deals drawn up and executed between 2003 and 2005, county records show. PB 1 Ventures is among of a series of entities managed by Troxler Ventures Partners Inc.; signature pages show Troxler is president of the corporation and signed for purchases, loans and most other contracts.
In all, Troxler’s subsidiaries paid about $47.7 million, or an average of about $25,880 per acre for the southwest Bakersfield land.
The bulk of those deals form what’s now the planned 6,000-home Old River Ranch development. The huge subdivision extends west from the school to cover a massive swath bordered by Taft Highway, South Allen Road and Panama Lane.
So far, though, the site — like most of the residential tracts around Independence High — is largely untouched.
Another 4,000 or so lots immediately around the campus are in the same boat: They’ve been approved on paper but developers have yet to spring funds to pull permits and start building.
Not everyone is out of the game. At least one tract with about 163 lots across from the school owned by Old River Road LLC, an Arroyo Grande company, is actively building.
Some of the southwest’s major projects, however, are on ice or flat-out kaput.
Take McAllister Ranch, for example. The 6,000-home golf-course development is currently in default on a $235 million loan.
The 9,000-home Flying Seven Ranch project died in the fall, bringing down plans for the 16,500-unit Gateway community that needed Flying Seven to annex into the city.
Numerous other smaller projects have officially extended start dates by a year or more, planning commission records show.
FALSE SPIKE?
What appeared to be a recent rush on homebuilding permits was probably a move by large homebuilders to beat a deadline, city staffers say.
March saw a surge in permits for single-family homes when developers pulled 290, nearly quadrupling numbers from February and January, records with the city of Bakersfield’s building division show. The list includes permits for tracts near Independence, such as Standard Pacific’s Windwood neighborhood north of Panama Lane, where walls and “now open” signs enclose empty land.
In April, though, just 20 permits were pulled, indicating the rush likely wasn’t permanent.
Phil Burns, the city of Bakersfield’s building director, said changes in the state building code meant house designs for some unbuilt tracts would have needed expensive tweaks. The city extended a deadline for large “production” builders until the end of March after the local homebuilders trade group lobbied staffers.
Developers have six months to construct a house after pulling the permit, Burns said, though he expects some might ask for an extension when the new deadline looms in September.
FIRST CLASS
Tony Frehner’s 13-year-old son, Tyler, will be among the 919 students at Independence on its first day of class Aug. 18th.
Like Mira Monte — enrollment there will start at 1,157 — the school is starting with only ninth and 10th graders. Eventually, both will enroll about 2,000 students apiece.
Frehner said school staffers have done a great job reaching out to students and parents with orientation sessions and other communications.
As for benefits and drawbacks of the rural surroundings, Frehner hasn’t noticed.
“I actually haven’t given it a thought either way,” he said.
His main concern is traffic along Panama Lane.
He plans to drop Tyler off on the way to his job as a physical therapist.
These days, a four-way stop sign stands at Panama and Old River roads.
A signal should be installed this year, said Steve Walker, traffic engineer with the city of Bakersfield.
The traffic light wasn’t necessarily expedited because of the school’s opening, Walker said, but was already in the works because of residential growth in the area. A mix of gas-tax money and impact fees from developers provided most of the funds, he said.
Any upgrades to the four-way stop sign south of campus at Old River and Taft Highway, Walker said, are up to state transportation officials.
At the Mira Monte campus, the district paid to install a signal at South Fairfax and Redbank roads, Walker said.
LIKE OLD TIMES
Scott, the district’s assistant business superintendent, said the current bust is much like one that hit Kern after a previous boom.
“It looks an awful lot like what happened in ’93-’94 in this community,” Scott said, when a dramatic slowdown hit after a growth spurt.
Whether the past has bearing on how the current market plays out is anyone’s guess.
City numbers show homebuilding has dropped dramatically in the last two years.
In 2005, the peak for homebuilders, Bakersfield staffers issued more than 5,200 permits for new houses.
By 2007, the number had dropped to 1,820. This year is off to yet a slower start.
In the early 1990s, Scott said, the district bought what’s now the Liberty High School site.
“We faced some some criticism at the time for picking a site where there wouldn’t be any students,” he said about what’s now a suburban campus in the northwest.
“Sure, there may not be much growth around Independence in the next year or two,” Scott said. “We still believe that it’s a terrific site for southwest Bakersfield.”