Archive for Friday, August 9, 2013

Baldwin school district having trouble selling Chapel Street properties

The Baldwin school district has been unable to sell two of the three Chapel Street buildings it has had on the market for more than two years. Both buildings will soon serve no function for the district. The district will be moving its offices out of the old middle school in October and the South Gymnasium immediately to the west will no longer be the home of the district's wrestling program with the completion this month of the Baldwin Junior High School auditorium remodel.

The Baldwin school district has been unable to sell two of the three Chapel Street buildings it has had on the market for more than two years. Both buildings will soon serve no function for the district. The district will be moving its offices out of the old middle school in October and the South Gymnasium immediately to the west will no longer be the home of the district's wrestling program with the completion this month of the Baldwin Junior High School auditorium remodel.

August 9, 2013

The Baldwin City school district has a sweet deal to offer anyone looking for developed property in the heart of the city:

For sale by owner: Three-story office building plus gymnasium. Total of 41,629 square feet of developed space, plus parking lot and vacant lot currently used for ball diamonds. Located on 2.3 acres near U.S. Highway 56. Close to downtown and Baker University. Zoned residential. Appraised at, $415,000, but owner will accept reasonable offers.

The problem is, the district has been trying to sell that property for more than two years, and so far it has gotten barely more than a nibble of interest.

“They're hard to sell,” district superintendent Paul Dorathy said this week. He noted the buildings date back to the 1920s and 1930s, which means they would need a lot of work to be converted to other uses. One requirement of any new owner would be to make the old school building compliant with the Americans with Disabilities Act.

Dorathy said the district has been successful in recent months in selling off two other buildings it no longer needed — the old primary school in Baldwin City, which was sold in October to the Lighthouse Baptist Church for $200,000, and the former Marion Springs school, about eight miles west of Baldwin City, which was purchased by a group of private individuals in April for $90,000.

“I think we've been lucky to do what we've done,” Dorathy said.

Self-marketing

But Alan Miller, a realtor in Baldwin City, says there may be another reason the district is having trouble selling the buildings: Unless someone drove by and saw the for-sale signs, or looked at the district's website, they would have no clue the properties are even on the market.

“I have no direct experience in attempting to market a school building,” he said. “And I know it can't be easy. But, just having the information on their website, it just seems like a very limited attempt.”

Dorathy said the school board did, in fact, try to find a real estate agent who could market the buildings, but eventually made the decision to save money on commissions and fees by trying to sell the properties itself.

“That makes no sense at all to me,” Miller said. “Realtor fees, number one, can be negotiated. Number two, if you don't have active participation in the open market, you don't know what you're going to get on it. You could certainly try an auction with a reserve on it.”

Bad timing, bad market

The reason the Baldwin City district has so much property for sale, Dorathy said, is partly the result of unfortunate timing and a historically bad real estate market.

In 2008, the district passed a $22.9 million bond issue to build a new elementary school to replace the old primary school in the city. It also built new baseball fields and a performing arts center. That was just a few months before the collapse of the financial industry and the start of the Great Recession.

Soon after that, the state of Kansas began slashing education funding, prompting the district to close two other grade schools — Marion Springs and Vinland school, located about three miles north of Baldwin City — and transfer those students into the new elementary school building.

Dorathy said the school board hasn't yet decided to sell the Vinland school, mainly because those closings filled up the new elementary school sooner than expected, and the district may need the Vinland space for future growth.

The challenge for buyers

The challenge that the Baldwin City district faces in selling the old buildings is not unusual, officials say, because old school buildings pose an even bigger challenge to potential buyers.

The Lawrence school district has closed three elementary school buildings in recent years, but has been somewhat lucky in finding other uses for them.

The former Wakarusa school now houses offices for the Lawrence Virtual School and Lawrence Virtual High School. Centennial school at 2145 Louisiana St. now houses the district's adult education center. And East Heights School is being leased to the Boys and Girls Club of Lawrence for after-school programming.

But John Wilkins, a principal with Gould Evans architectural firm in Lawrence, said anyone buying an old school building should be prepared to invest a lot of money to refurbish it, because of the way they're laid out and other architectural and structural quirks.

“Generally speaking, if you're going to renovate a school building, you're going to pay 75 to 80 percent of a new building,” Wilkins said. “So to sell it and have somebody come in and renovate it for their use, it comes down to dollars.”

Comments

1776attorney 8 months, 2 weeks ago

Is this really any surprise? I predicted exactly this scenario last year. My prediction was based on several factors that could have been avoided had the superintendent and then school board solicited some professional advice and remained patient for the real estate market to recover.

The Chapel Street property comprised 2 square blocks of land on which 2 connected school buildings are constructed. The old, historic junior high building has a footprint taking up approximately 1/3 of the property and the old elementary school 2/3 of the land.

The county appraised the properties, including buildings at approximately $1.3 million. The school district’s independent appraisal came to approximately $850,000.

The school district in a rush to make it look like they were accomplishing something sold 2/3 of the total property, including the old elementary school for only $200,000 last year (hundreds of thousands of dollars less than the appraised value).

Last year I predicted that by selling the properties piecemeal the school district would be left with an unsellable “white elephant” in the old, historic junior high property. This remaining 1/3 of the property has little value to a developer or property owner because the building occupies almost all the land of the 1/3 plot leaving little room to further develop the property. Plus the building contains lead paint and asbestos; a very expensive proposition for removal.

Additionally, the old elementary school abuts the junior high school building. There is no property separation or turf buffer. The 2 buildings are connected.

The property should have been sold as a whole. All the land and 2 buildings sold for near the appraised price. This is what would have been in the best interest of taxpayers and would have avoided the current situation of now owning a “white elephant”. Long after this superintendent has retired and the school board (that made these decisions) is replaced, taxpayers will still be paying for this mistake.

0

Commenting has been disabled for this item.