BENTONVILLE — Reading, writing, ’rithmetic and — real estate?
That fourth “R” was a definite theme for the School District, which bought six pieces of property — a total of 288 acres in Bentonville, Centerton and Rogers — for $9.4 million in 2017.
The district purchased most of the land for school construction in areas where it’s seeing its heaviest growth.
“That’s how you create the neighborhood schools,” said Debbie Jones, superintendent. “One of the board’s big goals has been to move toward a feeder pattern.
And the closer we get to neighborhood schools, the more capacity we build, the better able we are to do that.”
The district also sold 40 acres on Bright Road to a developer for $1.6 million. The district’s warehouse property on South Main Street, put up for sale for $1 million last summer, awaits a buyer.
Among Northwest Arkansas’ four largest school districts, Bentonville was by far the most active on the real estate market in 2017.
The Springdale School District bought three properties for a combined $1.9 million. The Rogers School District spent $1.5 million on a church building it plans to convert into a professional development center. Fayetteville wasn’t involved in any property deals this year.
THE NEGOTIATOR
Janet Schwanhausser, Bentonville’s finance director, led property negotiation for the district. She felt confident taking on the duty because of the free advice she could rely on from professionals throughout the community, she said.
She did, however, hire a real estate agent to handle the sale of the downtown warehouse property. Two contracts on that property have fallen through, though Schwanhausser said she was expecting another offer soon.
“I feel because that piece of property is in such a hot part of town, I want to make sure we get the best price we can get, and I don’t feel confident I could do that without a Realtor,” she said.
The warehouse became expendable after the district bought the former Ambassadors for Christ Academy building in October to serve as its new warehouse.
That building went up for sale last spring shortly after the school closed. The district bought it for $2.8 million and will spend about another $1 million renovating it. It will provide more than four times the space the current warehouse provides.
Schwanhausser said the sizes and locations of the new properties offer the district flexibility as it plans to build several schools over the next 10 years. The district might have to build a certain school sooner or later depending on enrollment growth.
Schwanhausser is relieved to know the property acquisitions take care of the district’s needs for a decade.
“I don’t have to keep watching prices of land in the southwest part of the district and think, oh, we’re going to have to buy fast or we won’t be able to buy,” she said.
Mervin Jebaraj, director of the Center for Business Research and Economic Research at the University of Arkansas, Fayetteville, said earlier this year the supply of available lots in the region is shrinking.
“Even more significant is that the supply of lots in desirable areas close to amenities is becoming an issue that will have to be addressed in the near-term,” Jebaraj, who was also lead researcher for the Skyline Report, a joint project of Arvest Bank and the university’s research center, stated in the mid-year report.
Bentonville’s enrollment was 16,893 students as of Dec. 1, about 13 percent higher than it was five years ago. Most of the district’s growth is in its southern and western sections.
The district put together a 10-year facility plan in 2016 that projected how many new buildings would be needed and could be built based on forecasted enrollment growth and finances.
THE PROCESS
The School Board agreed to buy three properties in January and one property in February, all will be used to build either one or multiple schools. The district closed on each of those properties in June. Getting to that point was about a two-year process, Schwanhausser said.
The district started with a list of 16 properties and gradually whittled down the list. Paul Wallace, director of facilities; Tanya Sharp, director of student services; Jones and Schwanhausser toured the district looking at each piece of land.
They considered price, terrain, access to utilities and the number of students in the area. All that information went into a spreadsheet.
Then the challenge was figuring out how to group the properties to fit the district’s needs in terms of size and location. It was a puzzle of sorts, Schwanhausser said.
“So when you have a group of 16 properties, you have to say, ‘Well, if we have this piece, then we would want this one, but not this one,’” she said.
One of the new properties is on Haxton Road in Rogers, where construction will begin soon on the 12th elementary school.
That property originally wasn’t on the district’s radar because it was 60 acres, more than the district needed. But the owner of Thrilled Land Investments agreed to sell 40 of the acres because he wanted an elementary school near one of his other developments, Schwanhausser said.
Jones said officials were planning to put the next elementary school on property the district had just bought across from the Benton County Fairgrounds, but that plan changed after the Haxton Road property became available.
A school was “so much more needed in the south,” Jones said.
The property is large enough that it also could accommodate the next middle school, tentatively planned to open in five years, Jones said.
Tom Reed, founder of Reed & Associates of Fayetteville, said his firm does primarily commercial and industrial appraisals, but also appraisals of land being targeted for subdivision development.
“Certainly we see that proximity to an existing school affects the price of that nearby vacant land,” he said.
In an area where there’s a school, there’s ready access to utilities, which attracts developers of residential neighborhoods, Reed said.
“If you’ve got all the utilities in that immediate area, then that impacts the value of (vacant land) accordingly. And if you’ve got increased demand because of individuals wanting to live in a subdivision close to a school, increased demand is going to translate to increases in prices.”
THE PRICE IS BRIGHT
The district sold its 40 acres at Southwest Wentworth Avenue and Southwest Bright Road because of the number of schools already in that area and the congestion additional schools would create.
The board stirred some controversy in July when it decided to apply the $1.6 million from the sale of that land, plus another $376,000, toward completion of the stadium at West High School in Centerton.
The decision came two months after a successful millage campaign, during which district officials pledged no money raised from the tax increase would go toward the stadium.
The millage increase was dedicated strictly for land and buildings. Once it was approved, it was time to move on to the next goal, Jones said.
Not having a stadium at West High School poses logistical challenges for the school. Attempts to raise money for that project hadn’t been successful, Jones said.
“So we started looking everywhere we had excess money,” she said. “And that was in that land.”
In October, the board agreed in a 5-2 vote to finish West High School’s stadium with the $1.9 million already designated for the project, plus $1.8 million from sponsorship contributions to the district’s Athletic Department over 15 years.
Jones acknowledged the amount of property obtained this year was extraordinary for one district, but said a growing district such as Bentonville must have a plan.
“And I think we’ve laid the foundation for a very smooth operation,” she said.
Millage passed
The Bentonville School District earned approval of a 1.9-mill tax increase in May. The millage request passed with 2,847 votes (65 percent) in favor and 1,518 votes (35 percent) against. The increase raised Bentonville’s millage rate to 48.5, one of the highest rates in Arkansas.
Bentonville will use the millage increase, combined with state grants and refinancing of old bonds, to build two elementary schools, a middle school and a junior high school over the next several years. The first of those new schools, an elementary, is set to open on Haxton Road in Rogers in 2019.
Source: Staff report
Dave Perozek can be reached at [email protected] or on Twitter @NWADaveP.