San Diego — No matter how troubled or dysfunctional its educational policy may seem, the San Diego Unified School District is still big business. With an annual operating budget of just over a billion dollars and another $1.5 billion in Prop MM bond money to spend on construction, the district cuts a powerful figure among local vendors, who profit from architectural and construction services, paper clips, computers, and photocopying machines, and the huge payroll for teachers and support staff.

Then there is the district's real estate, a multimillion-dollar portfolio of some of the choicest land in the city. Most is occupied by schools, but hungry developers, eager to build shopping malls and condo complexes, all in the midst of the region's biggest real estate boom, covet much of the land that isn't currently used for education and even some that is. The spare property is a mixture of closed schools, land that was acquired to build schools that for some reason were never built, and industrial buildings and warehouses.

Developers and their lobbyists are a quiet but constant presence in the school- district offices, meeting with friendly school-board members, lobbying staff members, trying to get any kind of edge they can in the race to relieve the district of its "excess" property. In some cases, developers attempt to influence administration officials directly, suggesting possible school closures or mothballing of support facilities in order to make way for commercial or residential development.

Another example of developer influence came this summer with the easy passage of an Assembly bill sponsored by Democrat Christine Kehoe. The measure, expected to be signed by the governor, will create a so-called joint powers authority, combining the political might and public money of the city's Redevelopment Agency, its Housing Commission, and the school district, ostensibly to build a new elementary school and replacement housing for the units torn down for the school. But the bill also allows large-scale commercial development on the proposed City Heights site, and it is expected that a select few developers will benefit substantially from a taxpayer-financed project much more expensive and elaborate than once deemed necessary to achieve the original goals.

So far this year, Kehoe has received thousands of dollars from business and development interests, including McMillin Management Services of National City ($3000); Vonnie McMillin ($1000); Casey, Gerry, Reed & Schenk ($1250); Regional Council of Carpenters ($1000); California Building Industry Association ($1000); City Heights developer William Jones ($1000); real estate investor Bud Fischer ($1000); San Diego County Apartment Association PAC ($1000); and Laura Galinson ($500) of Price Entities, an organization related to the nonprofit Price Family Charitable Fund, which first proposed, underwrote, and backed the school JPA plan.

Two weeks ago, Kehoe, who most agree faces only token opposition, mailed a fundraising letter to many of her business supporters, asking for even more money. "As Assistant Speaker Pro Tem, I am automatically a target of attack -- my opponents would love nothing more than to weaken the position of a member of the Democratic Leadership," the letter began.

"This election is about what comes next, and I need your financial support to show that I am ready for the battles ahead. Please help me send a clear message to anyone who wants to attack our efforts that we are ready to continue our work together for the City of San Diego.

"My fundraising is behind schedule, and I still need to raise nearly $200,000 between now and November -- with your help I can put my fundraising on track.

"We were able to help the San Diego Unified School District and the City of San Diego form a joint agency to develop a mixed-use school project in City Heights that combines new school construction with replacement housing, recreational areas, public facilities, and neighborhood retail shops. I am proud of the work we have accomplished and am committed to continue working on the issues facing San Diego, but I cannot do this without your financial support."

From many developers' point of view, the biggest obstacle to development of school-owned land has been the state-required four-to-one majority board vote to approve sale or long-term leases of land. That was a big factor two years ago in the demise of district superintendent Alan Bersin's ad hoc real estate committee, controlled by Bersin's father-in-law Stanley Foster, a wealthy San Diego clothesmaker and real estate magnate who died earlier this year. Foster's committee came to public attention as it drew up a list of what it considered likely development sites to be cast off by the district. It was quietly folded following voter rejection in November 2000 of school-board candidate Julie Dubick, a real estate lawyer who was heavily backed by development interests and the San Diego Chamber of Commerce. She was expected to have been the fourth go-ahead vote to sell off the land.

Since then, jockeying among developers and school vendors for a piece of the school-district pie has continued unabated, and this year's two school-board races, which again offer development interests a chance to obtain the fourth pro-development vote on the board, are shaping up as yet another test of strength for the various lobbies that depend on the school district for their livelihoods. The San Diego Education Association, the schoolteachers' union, has endorsed Jeff Lee and incumbent John de Beck. Various business interests have come out in favor of their respective opponents, Katherine Nakamura and Clyde Fuller, and the Union-Tribune, which consistently has favored more growth and development, joined in this week.

Ballot endorsements, on file with the Registrar of Voters, are another way of handicapping the candidates. Nakamura has recruited some of the city's most wired politicos to back her bid. Heading the list is Sheriff Bill Kolender, the onetime police chief of San Diego who later went to work for the Union-Tribune and assisted the company in its ultimately successful battle to oust the Newspaper Guild, the union representing reporters and the paper's advertising sales force, from the plant.

Over the years, Kolender has championed a number of causes backed by the Union-Tribune and the city's business establishment, including the Chargers ticket guarantee. After a rocky tenure as police chief, during which he was forced to defend himself in 1986 against charges raised in the Los Angeles Times that the department had fixed traffic tickets for Chargers team members, Kolender found his place with the Union-Tribune.

He later left to become then-governor Pete Wilson's head of the California Youth Authority, returning here to run for sheriff in 1994. A nimble fundraiser with far-reaching developer and business contacts, Kolender was easily reelected to his third term this March. Kolender's presence on her ballot statement is a coup for Nakamura and, insiders say, is a sure sign that the U-T and its allies in the business community will ante up plenty of favorable attention and big money as the election draws nearer.

Another Nakamura endorser is Democratic state senator Dede Alpert, who herself was endorsed by Kolender, a Republican, in her November 2000 reelection race against Republican Larry Stirling. Reinforcing the insider theme of Nakamura's endorsements is Democratic assemblyman Juan Vargas, a former San Diego city councilman and one of the city's champion political fundraisers, who is ultimately expected to seek a congressional seat when he is termed out. While on the council, Vargas voted for the Chargers ticket guarantee and backed downtown business interests. Four members of the San Diego City Council also added their support: Vargas protégé Ralph Inzunza, Jim Madaffer, Toni Atkins, and Scott Peters.

In early fundraising filings, Nakamura's supporters have included area car dealers such as Carlsbad resident and Mercedes dealer Robert Hoehn and San Diego's Tom Stall. Employees of RNP Architects, the firm of Kotaro Nakamura, the candidate's husband, also kicked in. They include Joe Mansfield, Mun Ying Kung, and Byron Anderson.

For his part, Nakamura's opponent, Jeff Lee, does not list individuals as endorsers on his ballot statement. Instead, he offers the teacher's union endorsement ("representing 9000") and that of the Peace Officer Research Association of California, San Diego/Imperial Counties, a law enforcement labor organization, as well as the California School Employees Association, the Police Officers Association of the school district, and three other groups: Mathematically Correct, Parents for Real Education Reform, and Voters for Truth in Education. Many of his early contributions have come from schoolteachers and a number of individuals identified only as "parent."

Over in District C, where former FBI agent Clyde Fuller is taking on longtime incumbent John de Beck, Fuller's endorsements have a familiar ring: Bill Kolender, Juan Vargas, and "6 San Diego City Councilmembers," whose names aren't listed individually. De Beck, too, lists some familiar names: the San Diego Education Association, the Police Officers Research Association, and the California School Employees Association. He's also endorsed by Serra Mesans for Quality Education.

The vast majority of de Beck's donors are teachers, and he received $500 each from the San Diego Education Association and California Teachers Association.

On the other side of the fence, political neophyte Fuller's early donors are heavy on local developers and businessmen, including Phil Blair, co-owner of a local temporary work franchise, who has been active on behalf of Superintendent Alan Bersin and the chamber of commerce's education agenda. His firm, Manpower of Southern Nevada, gave $500, and its employee Andrew Katz of Las Vegas gave $500. Katz is the son of Blair's longtime partner, Mel Katz, who has also long been involved in school-district politics on the side of Bersin and the chamber of commerce's development interests.

Malin Burnham, the downtown real estate developer who spent more than $75,000 of his own money in the failed attempt to elect Julie Dubick in 2000, kicked in the maximum $1000, as did his wife Roberta. Terry Arnett, senior vice president of Roel Construction, gave $200. Karen Turk, wife of Pacific Beach developer Mike Turk, a close friend and real estate partner of former-mayor and radio talk-show host Roger Hedgecock, gave $1000. Developer Stephen B. Willliams of Sentre Partners also contributed $1000; Joe Craver, a retired Air Force colonel, military marketing consultant, and chamber of commerce insider, gave $250.