Extensive vandalism at the vacant Lynch Drive Elementary School in the North Little Rock School District has put a hold on the district's planned sale of that school, plus the Baring Cross, Rose City and Argenta schools, to a commercial property developer.
The North Little Rock School Board voted in April to sell the vacant campuses for $500,000 to TerraForma LLC of Maumelle.
Before the sale was finalized, however, the most valuable of the four schools -- Lynch Drive -- was heavily vandalized, causing TerraForma to ask for changes in the terms of the sale, Adam Jenkins, the district's real estate agent, told the School Board at a special meeting Thursday.
The potential buyer proposed tying the purchase of the four properties for $325,000 to an option to purchase a fifth vacant school, the old Amboy Elementary, for $175,000. The offer calls for $75,000 of the $325,000 sale price to be held in escrow for up to 90 days while TerraForma considers the purchase of the old Amboy building.
If the buyer were to ultimately decide against purchasing Amboy, the $75,000 in escrow would be refunded to the developer, according to the proposal. That would leave the district with $250,000 for the four original properties in the sale.
If the buyer were to proceed with the Amboy purchase under that offer, another $175,000 would be paid to the district, bringing the total sale price for the five schools to $500,000.
The excess buildings are the result of the district's capital improvement program. The district is close to completing a systemwide program that is reducing 21 schools to 13, nearly all of which are either built new or extensively remodeled.
School Board members balked at the TerraForma proposal for different reasons. Some were concerned about the low sale price in comparison to appraised values of the properties, which exceed $4 million.
There were also concerns among board members about the potential for the schools to be resold to charter schools or other organizations that would compete with the district for students.
Ultimately, the board voted 6-1 to make a counteroffer to TerraForma to sell Lynch Drive, Baring Cross, Rose City and Argenta for $250,000, extracting the Amboy property from the arrangement altogether.
Voting for the counteroffer were board President Scott Miller and members Luke King, Dorothy Williams, Sandi Campbell, Darrell Montgomery and Scott Teague. Board member Ron Treat voted against it.
Treat had questioned what had been done to advertise the old Amboy campus, which just became available for sale in May. The other campuses have been on the market since December 2013.
Treat wondered if there would be better offers on the vacant Amboy over time.
Treat also said he didn't want to sell the buildings for less than the value of the land that they sit on.
Williams objected to "being held hostage" to "fire sale" prices and the threat of schools that would compete against traditional public schools. She questioned whether it would be better to demolish the vacant schools to prevent independent public charter schools or other education organizations from acquiring the schools and competing with the North Little Rock district for students.
Gene Hawk, the district's director of facilities management, estimated that it would cost the district about $850,000 to demolish the buildings. Hawk also said that keeping the vacant buildings would work against the district when it seeks state aid for new classrooms or new schools in future years.
The district has included provisions in the sale contract that require TerraForma to give the district the right of first refusal to buy back a school before it sells the school to a third party. Neither TerraForma nor the third party, however, would be obligated to say how the third party would use the property. The district would have to buy back the property at whatever price the third party agrees to pay for a property.
Other board members saw benefits to the proposed sale of the schools, however.
King said prohibiting the buildings from being used as schools takes away their best use -- which puts a ceiling on their value.
Teague warned that the vacant Amboy building, which has been replaced with a new Amboy school a short distance away, is also a target for vandalism and that it is costly to insure a vacant building against break-ins.
He also said that demolishing the buildings is a cost that the district can't afford as it works to absorb new school construction costs and the loss of state desegregation aid after the 2017-18 school year.
"We need to move them off our books," Teague, a banker, said about the vacant schools, adding that the district can only do so much to prevent the establishment of charter schools.
"I realize there are variables that make charter schools more nimble in some cases than us," he said. "At some point, we have got to have confidence in what we are doing. We just need to go head to head and compete."
The 9,000-student district is nearing the end of its capital improvement program, which has now whittled the district's schools down to 14; one more will close by next year.
Metro on 09/04/2015