Bush School loses out on MLK Elementary bid

It may come as a bit of a shock to some Seattle taxpayers to learn that the School District, which is currently asking voters to approve a new $48 million tax levy, is planning to turn down several million dollars that it could have realized from the sale of the Martin Luther King Elementary School site in Madison Valley, located just on the doorstep of Madison Park (3201 E. Republican Street).

As we reported this summer, the school was closed in 2007, and the District later decided to declare the property “surplus” and sell it. Bidders submitted proposals to the District earlier this year; and it now appears that the lowest bidder will be declared the winner, meaning that the Seattle Public Schools will walk away from millions of dollars that it could have obtained by accepting the highest bid. Moreover, some neighbors of the MLK site express concern that the winning bidder does not have funds either to make needed structural upgrades to the building or to operate the property once it takes possession. When you add to all of this the fact that the winning bidder is a church which is getting the money to buy the property from State taxpayers, you have the makings of a controversial situation. Curiously, this story has not been picked up by the media, other than the neighboring Central District News blog, which covers Madison Valley.

This is where the situation stands today. On Wednesday evening, the Seattle School Board is expected to accept the recommendation of the Superintendant that it approve a $2.4 million sale of the MLK site to the First African Methodist Episcopalian Church (FAME), located at 1522 14th Avenue. This is in spite of the fact that the highest bidder for the property was the neighboring Bush School (3400 E. Harrison St.), which had submitted an offer valued by the District at between $3.0 million (to purchase the building) and $5.6 million (the net present value of a proposed 99-year lease of the site). Bush and a second bidder, Citizens for a Community Center at MLK (CCC@MLK), a non-profit group which bid $2.5 million, thus lost out to FAME, a tax-exempt religious organization which is benefiting from $2.4 million in funding by the State legislature in support of the purchase. By approving the sale to FAME, the School Board will be accepting a $3.2 million discount from the real value of the property as determined by the market.

But is there more to the story than this? An insight into the District’s thinking is provided in the Superintendant’s recommendation to the Board, which states that the First AME Church bid should be accepted “because the value of keeping the building available for support of youth education and social services creates an intangible benefit to the community which outweighs the financial gain offered by the higher-priced [Bush School] proposal.”

The School Board’s standard for the sale of the school was originally established as “the highest bid wins, unless one or more firms meets [sic] requirements for Youth Education Center or providing social services.” If a bidder agreed to devote 50% or more of the building space to support youth education or governmental or social services, the Board allowed for that bid to receive “special treatment.” School staff estimated that FAME proposed to use 60% of the site for “youth education activities,” the Bush School (which planned to tear the building down) proposed allowing community use of their new soccer field for a minimum of 1,000 hours per year, while the CCC@MLK said it would devote 54% of the total space to youth services and another 19% to social services. The District’s staff quantified the “value to the community” of having FAME control the space as $50,000 per year, versus $23,000 for the CCC@MLK proposal, and $20,000 for the Bush proposal.

One of the issues raised by the proposed sale to FAME is the fact that there is a statutory requirement that the School District achieve at least 90% of “fair market value” if it permits a community organization to acquire school property. Because there is a recent appraisal of the MLK property valuing it at $2.4 million, the staff concluded that the sale to FAME meets the statutory requirement.

The School District’s position is that the value of the property is set by the appraisal and not by the bidding process. The clear implication of this point of view is that the Bush School was willing to pay a huge premium over what is a “fair” market price for the property. Bush, incidentally, originally offered $3.7 million for MLK, and the net present value of Bush’s initial long-term lease proposal was pegged by the School District at $9 million. Bush later revised its offer downward as a result of several factors, including “changes in the competitive landscape of the property.” Meaning, presumably, the fact that other bidders were publicly known to be offering far less.

When the FAME offer was first submitted this summer, a question initially raised by school staff was whether or not a sale to a religious organization violates statutory or constitutional requirements. Ron English, a lawyer with the District who was the principal staffer for the MLK bidding process, concluded, however, that “there is no prohibition against public agencies doing business with religious institutions, only that they not be given preference.” He told us that “the selection criteria were neutral in that regard, so there is no problem.”

Bush School seems to be accepting its apparent loss with good grace. Frank Magusin, Bush’s Head of School, when asked about the apparent outcome, said "we are disappointed by the recommendation to sell the property to First A.M.E. Church, since we thought our proposal provided the greatest overall benefit for the district, the immediate neighborhood, and the broader Seattle community, while at the same time offering much needed support for our educational program." He adds, however, that if FAME acquires the MLK property, “we will welcome them to the neighborhood and hope to find ways to work together with them to support their youth education programs.”

CCC@MLK, meanwhile, has protested the District’s upcoming sale of MLK to FAME. Adrienne Bailey, President of the group, said she believes “there was impropriety and hypocrisy” in the School Board’s process. The staff’s analysis of the FAME bid was flawed, she said, and the CCC bid was “scrutinized to a higher standard than anyone else’s bid.” The bottom line from her point view is that the “District is choosing the lowest bidder with the least amount of services.”

The Madison Valley neighborhood group had been hoping to create a community center in the space, offering lifelong learning classes, community meeting space, "an incubator work space for small and grass-root groups and organizations," a computer center, a public playground, and services for youth, families and veterans. “We’re bringing quality and we’re bringing collaboration with other major institutions, such as Bastyr University and Spectrum Dance,” she said.

What FAME promised the School District is an array of youth and adult programs, including dance and fitness classes, sports programs, educational classes and workshops, daycare, and “other community activities.” The District gave the nod to FAME at least in part because of its greater emphasis on youth programs. Bailey, however, believes that the programs FAME has offered are not as well developed, documented, or thought out as CCC@MLK's. She wants to be able to have both groups present their proposals to the full School Board in an open meeting “so the public can see what is fully being offered with documentation." In her opinion, FAME does not have the "money, resources, or expertise" to be able to operate the building once it takes possession.

Did the District do any analysis to determine the likelihood that either of the competing groups (CCC and FAME) had the resources to be able to bring the school up to seismic standards, maintain the building,and pay for the operations of the facility once in control of it? The answer from School District staffer Ron English is “we did not do a separate analysis.”

It is unlikely that Bailey’s group will get the chance to make the hoped-for presentation to the School Board at its Wednesday session. The Superintendent denied the CCC@MLK appeal earlier this month, paving the way for the Board to act. “I felt they were saying give up and go away,” Bailey told us.

Some MLK neighbors, meanwhile, have expressed concern over the potential negative impact on neighborhood property values of having FAME operate its programs at the site. One resident recently emailed her neighbors expressing the view that "FAME brings nothing to the neighborhood, whereas the Bush proposal brings a much needed playfield and playground." Another neighbor, also in a broadside email, questioned whether the Board's acceptance of the FAME offer might "violate a fiduciary duty to the taxpayers." But as one MLK neighbor admitted, there may also be socioeconomic and racial tensions that play a role in the some of the opposition to FAME's sudden arrival in the neighborhood.

Is the sale to FAME a foregone conclusion? Probably so. Blogger Melissa Westbrook (Save Seattle Schools), a long-time observer of the School District’s modus operandi, has this to say about the situation: “The CCC[@MLK] said that ‘the district analysis was flawed.’ That would certainly not be the first time that has ever been said about staff analysis. However, as we know, the Board has never gone against anything that the Superintendent has recommended, so I’d say it’s done.”

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[Editorial aside: we attempted to get FAME's take on the situation but were told by the Church that only the Pastor, Carey Anderson, was authorized to speak to the media on the subject. He did not respond to our requests for comment.]