Wednesday, February 13, 2008

Ambassador Schools Cost Soars to $566 Million: LAUSD Officials Attribute Price Increase To Inflation, Cost of Materials

by Richard Guzmán | LA Downtown News

2/11/08 - The construction budget for the Central Los Angeles New Learning Center No. 1, also known as the Ambassador Hotel school project, has skyrocketed from a projected $235 million six years ago to $380 million.

Construction continues on the LAUSD complex at the site of the former Ambassador Hotel. The first of three schools is scheduled to open to students in fall 2009. Photo by Gary Leonard.

Coupled with fees for designs, environmental tests, inspections and other matters, the total price tag comes in at a whopping $566 million, making it the most expensive project on the LAUSD's roster of new construction. It is scheduled to begin serving students next year.

Despite costing more than a half-billion dollars, LAUSD officials say the project, which will contain more than 4,500 seats, is under control. The $145 million construction increase from six years ago stems from the same inflation and rising materials costs - especially steel and wood - that caused other development budgets to soar.

"It's certainly one of our biggest, and you have to put it in perspective because it is three schools," said Shannon Haber, a spokeswoman for the LAUSD.

Project Manager John Kuprenas said considering the scope of the project, the costs are reasonable.

"We're building 684,944 square feet of classrooms, administrative space and schools, so when you look at that on a square-foot basis, we're only at about $565 a square foot, which is a tremendous figure," Kuprenas said. "We're building three schools in one 24-acre parcel of land."

The Wilshire Boulevard project calls for a 1,050-seat school for kindergarten through third graders, a 1,000-seat school for fourth through eighth grade students and a 2,474-seat high school. The campus will also include two gymnasiums, a swimming pool, a soccer field and other athletic facilities, as well as a 522-seat auditorium and a one-third acre public park and art installation honoring Sen. Robert F. Kennedy.
Completion of the elementary school is scheduled for spring 2009 with classes starting in the fall; the other two schools should open by spring 2010, with classes starting that fall, Haber said.

Legal Disputes

Located just west of Downtown, the Ambassador Hotel opened in 1921 and helped spur the development of Wilshire Boulevard. It hosted six Academy Awards and every president from Hoover to Nixon, and drew Hollywood's elite. It closed in 1989 after falling on hard financial times.

The school project had a history of trouble, including a legal tangle with Donald Trump over acquiring the rights to the site.

The project had an original total budget of $341 million. It was delayed for years due to a legal dispute with the Los Angeles Conservancy and other preservation groups over how to convert the Ambassador Hotel complex, where presidential candidate Sen. Robert F. Kennedy was assassinated in 1968. Preservation groups also wanted to save the famed Cocoanut Grove nightclub.

The lawsuit with the Conservancy was settled in 2005 when, in exchange for being allowed to demolish the hotel, the LAUSD agreed to pay $4.9 million to establish the nonprofit Historic Schools Investment Fund, which provides an endowment to preserve historic schools within the district.

A second lawsuit over the demolition of the Cocoanut Grove building was dropped early this year after the District agreed to pay another $4 million into the fund.
Since the District had set aside $15 million to include historic items in the construction of the schools, which it used to settle the lawsuits, the litigation did not impact the project's total budget, Kuprenas said.

The rise in the budget was expected, he added.

"We set a budget when we establish the project scope. On this project, that was established about six years ago," he said. "We don't adjust budgets until we get our construction costs, until we get the [estimates from] the contractor. We knew the construction cost was escalating, the material costs increasing. We had that in the back of our minds."

Those who have waited for a school to open at the site said the cost is worth it - even at $566 million.

"We're still overcrowded in the area and are in need of schools so that students don't continue to be bused or attend schools that are overcrowded," said Veronica Melvin, executive director of the Alliance for a Better Community, a nonprofit group that urged the District to complete the project.

"You gotta build schools, and you deal with the realities of budgets that go with it, and part of it is rising costs," she said.

Contact Richard Guzmán at

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