UA Trustees: Offer $50 Million For High School

Officials Estimate $11 Million in Renovation Needed

Last updated Friday, June 6, 2008 8:54 PM CDT in News

By Dan Craft & Rose Ann Pearce
The Morning News

"It makes it awfully challenging," New said. "Had they been closer to the $59 million, it would have given us some flexibility. With such a gap, I'm not sure we can get there."

School board member Susan Heil called the offer "a great beginning."

But school board member John Delap said the university offer was a deal-breaker for him.

"This is nonstarter to me. I think it's done," Delap said. "I think we should reject this and not go any further."

The conversation between the district and the university needs to continue, said school board member Tim Hudson.

"We have to see where the terms pan out," Hudson said. "It's still money toward construction and less millage that we have to ask for."

The land is valuable, but renovation and improvement to make the high school buildings ideal for university use will cost another $11 million over the next several years, said Dave Gearhart, chancellor-elect.

"We believe it's in our best long-term interest, but purchasing the property doesn't give us move-in space," he said at the trustees meeting.

The $11 million "is a ballpark figure, but we think it's pretty accurate," said Don Pederson, vice chancellor for finance and administration.

The university might only have one shot at purchasing the property, said trustee Jim Lindsey.

"We may never see the chance to get this again," Lindsey said. "It's certainly the most unique opportunity to come our way in my 10 years on the board."

Building an equivalent 300,000 square feet of space at $300 per square foot would cost the university about $120 million, Lindsey said.

Negotiation with the school district will focus on a timeline, terms of a lease-back to the school district until a new school is built, and other issues, said chancellor John White.

"What we're talking about negotiating is specific terms of the lease and purchase, not the price," White said.

Lease-back provisions will be critical. If the sale is completed the school district probably will have to lease the facilities while a new high school is under construction. The construction timetable for a new high school is between three and five years.

The university is the only known potential buyer for the property.

"We could pass it up now, and wonder in 10 years why we didn't grab it at $50 million," said trustee John Tyson. "Even assuming it ever comes available again, you know the price is only going to go up."

A phased increase in the facility fee would cover the 30-year bonds issued for the purchase, said Pederson.

The fee would increase by $2 per credit hour in each of the next five years, Pederson said.

Any lease payments from the school district would also be put toward paying off the bonds, he said.

Some facilities, including classrooms and athletic facilities, could be used by the university as soon as they take possession of the property, said Gearhart, a Fayetteville High graduate.

"I've tried not to let my status as a graduate influence this decision," Gearhart said. "I really believe this is in the best interests of the university, which has to be my first concern, but I think it will be a good thing for Fayetteville as well."

Trustee Mike Akin asked whether any land-trade possibilities existed where the university might swap the high school site for university-owned land where a high school might be built.

"Well, we've got a nuclear reactor we're looking to get rid of, but I'm pretty sure they don't want it," Gearhart said, referring to the decommissioned Southeast Fast Oxidizing Reactor property southwest of Fayetteville.

The purchase would be a departure from other property acquisitions in recent years, White said.

"We've been nibbling away, picking up much smaller properties as they become available," White said. "This is a much bigger bite for us."

It was unclear Friday the impact a sale of the high school will have on a millage campaign in the coming months.

The school board has said for months that building a new high school is contingent on a successful millage campaign.

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