By The 411 News
Attorney Clorius Lay, a member of the Fiscal Management Board that monitors the Gary Community School Corporation’s emergency manager, voiced his concerns about the recent notice of 33 unused school properties for sale.
According the GCSC website, the Fiscal Management Board is comprised of four appointees. The governing body appoints one member. The mayor also appoints one member. Another member is appointed by the superintendent of public instruction. A fourth member is appointed by the state board of education.
At their quarterly meeting last week, Lay said the asking prices should be modified. “I’m just making a suggestion. There is no way you’re going to sell a school for $5 million. I believe Beckman was the last time a school was sold, and it went for $100,000.” He added, “The hardest buildings to sell are hospitals, theaters, and schools. They almost have to be used for their original purpose.”
When bids were opened Monday, there was only one offer for a property. That was from the City of Gary, offering $100,000 for the closed Benjamin Franklin Elementary School in Glen Park. The asking price was $1.434 million. Franklin Elementary sits in the city’s University Park redevelopment plans.
Another board member, former State Senator Earline Rogers, also questioned the asking prices. “I too looked at the buildings and asking prices. Nobody is going to pay this amount of money because of the amount of damages and locations.”
Listing prices for some of the school properties include: Edison High School, $3.374 million and Lew Wallace High School, $4.393 million. The asking price for the old Emerson High School and the adjacent Spaulding Elementary is $2.533 million. All have been subjected to weather damage, vandalism, or fires and are in a state of disrepair.
The asking price for Wirt-Emerson VPA, that closed this year, is $3.165 million. Dunbar-Pulaski had the highest asking price at $5.648 million; the school closed in 2017.
The asking prices are based on the Calumet Township Assessor’s assessed values. Emergency Manager Dr. Peggy Hinckley said, “These are just starting prices. Most people in commercial real estate do their own appraisals. If they have to tear down a building, they are going to offer what they know to be more of the market value.”
The school district is counting on those property sales to help reduce its annual deficit and also help pay down the school corporation’s nearly $100 million debt.
The emergency manager and her team have created a financial model, their “Viable Deficit Reduction Plan,” to balance the school district’s budget and begin paying off long-term debt. The plan lays out ways to reduce expenses and ways to increase revenues.
Board member and Purdue University Northwest Chancellor Thomas Keon wanted to be assured that the expected monies from the sale of the buildings did not match their assessed values, giving an inflated value in the deficit reduction plan.
“We were very conservative in our projections. We didn’t even have control of those buildings when we developed our deficit reduction plan,” said Chief Financial Officer Leonard Moody.
The Internal Revenue Service had placed liens on the buildings because of unpaid federal employee taxes. In April, the IRS and the school corporation reached a settlement and the liens were removed.
And from Hinckley, “We knew at the time those buildings had a negative value.”
The city’s offer came in the first round of bidding, open only to nearby units of government and educational institutions.
The final round of bidding for all interested parties closes on August 24th. The bids will be opened at West Side High School, on August 27th.
Moody said the district is on target to have a balanced budget at the end of 2019.
Crusader staff contributed to this story.