Monday, October 18, 2010

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.]

23 comments:

  1. Maybe given these data we as a voting block should vote against the tax levy
    I have never voted against an education emergency service or health care levy in my life but the school district did not act in a responsible manner on this issue

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  2. It would be a shame to vote against a tax levy that benefits education on the basis of one decision one didn't agree with. . . .

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  3. But if the school board can be so irresponsible with this decision, what other decisions are they making that are just as irresponsible?

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  4. Well, sign the petition if you have no confidence in the SPS Superindent here:
    http://www.petitiononline.com/S3B62010/petition.html

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  5. I am going to get everyone I know to vote against the levy and every levy from now on - the State giving $2.5 million dollars to buy property when they cry they are "poor". The Seattle Schools who has to foist a levy for school books and then turn down $2.5 millions dollars? Just pathetic - it doesn't matter who the superintendent is - this is just politics, city, state and the school district they don't care about budgets. I have been a supported of the public schools for more than 25+ years. This is almost criminal. I will fight every school levy and tax increase from now on.

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  6. This is unfortunately another example of misguided public officials abusing the public trust and public moneys in their attempt to “do good.” The process was obviously flawed on its face and a preference was illegally given to the FAME proposal. I am greatly disappointed in the decision – assuming it is final – and would support a legal challenge to the process. Bush School had the highest responsive bid and should have been awarded the contract. The fact that it was not is discriminatory and illegal.

    Having spent several years of my life (long ago) working in the Legal Dept of the School District, I am also saddened to see how far they have fallen.
    Stu Rolfe

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  7. I am also going to vote a big No to the levy. If you say you desperately need money, then take the highest bidder. This was not done fair and square.

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  8. The former head of facilities (in charge of management of district buildings), who only left his position this summer, is a member of First AME. The school board was aware of this. However, given that not only was he part of district's upper management AND the sale happened in his department, it is difficult for the recommendation from staff for First AME not to have a really nasty whiff of influence, particularly since their bid was not the highest. He is rumored to have recused himself from all issues regarding the sale of the MLK Elementary building - he's also rumored to have sat with First AME at school board meetings. Obviously, rumors should be taken with a grain of salt.

    And anon 10:40 - SPS being irresponsible with alot. The recent state audit noted that the school board and district management are putting public resources at risk (for a combination of not doing their jobs effectively and not knowing state or federal law or their own policies).

    There is an anti-levy group (full disclosure: I'm part of it). The website is Accountability Begins at the Top. Whether you vote for or against the levy, though, you should do it with some knowledge of the issues, not because the sale of a single building is frustrating.

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  9. well
    I just filled out my absentee ballot
    BIG FAT NO on SSD No 1 proposition 1

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  10. Thank you, Madison Park blogger. This is another excellent example of the kind of journalism that I miss in the US - drawing attention to real, impactful, locally relevant issues. I am glad for the service you provide (and sad about the state of reporting in organs like the Times that should do this job!).

    The sale is another travesty of favoritism and economic irrationality, not to mention a disgraceful abuse of public office.

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  11. As the person who is writing and maintaining Accountability Begins at the Top and working hard to defeat the levy, I agree with the conclusion that this is just one in a long line of decisions that seem suspect and not putting the needs of the district's students first.

    I also want to applaud the writing here. This is a very clear account of a complicated issue. Thank you. I wish more journalists took the time to understand and convey the news.

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  12. I wish the mainstream media would pick this up... maybe we should all send letter to the media outlets.

    The number one reasons I don't like politics/city government/etc... most have never had to balance a real business budget, make tough choices and be held accountable. Career politicians and elected officials/committees... its a sad fact I guess, but this would NEVER happen in the "real world" of business.

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  13. The School Board and District weren't even required to consider "special treatment" for the "youth education activities", but I fear the District and some School Board members may have mistakenly thought they were bound to give weight to that criteria.

    The RFP provided that price would be the primary factor, but stated that the District "reserved the right, in its sole discretion, to enter into a contract with a proposer that met the requirements of Board-Adopted Procedure H02.01" (which provides that proposers may be selected if at least half of the use is in support of youth education or by governmental agencies or for social services, notwithstanding a higher priced proposal).

    In short, the District and School Board had the *sole discretion* in deciding whether to pull in the "youth education activities" policy that was last revised in June 2004 (based on the version posted on the SPS website), a time when finances were less tight. Given the District's shortfall, it truly is a shame that the District and School Board did not jettison this *discretionary* consideration and accept a bid that would have brought at least an additional $750K to fund the long queue of capital improvements projects waiting for funds.

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  14. What? Local government making stupid decisions? I will have to go into my green bike box and contemplate that one for awhile.

    Defeating a levy is easy and only hurts the end-users, who are students in this case. Adults who make these types of decisions are the ones who should lose out, not some child. Go after the board and its leader. Ignorance about their own rules does not excuse their actions, rather it is even more reason to get rid of them.

    Also keep in mind that the district closed this neighborhood school and I think they have responsibility to condsider factors besides the bottom line about what goes into the void left behind. What if McGilvra were closed and put up for sale? Would Madison Park stand idly by while the needs of the community were ignored in deciding its final fate?

    Sounds to me like AME has some property with a building in need of extensive remodeling and Bush wants a soccer field. Surely all of you creative minds can figure something out, now that the government officials are out of the picture.

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  15. Would be curious to know if City Councilmember Bruce Harrel had any involvement? His bio states the following: "chief legal advisor to the First A.M.E. Church and First A.M.E. Housing Corporation": http://www.seattle.gov/council/harrell/bio.htm

    Bruce Harrell
    (206) 684-8804
    bruce.harrell@seattle.gov

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  16. For those not aware of the state auditors report: http://www.sao.wa.gov/findings/1003871.pdf

    • “The Seattle School District did not comply with state law on recording meeting minutes and making them available to the public.
    • The Seattle School District used capital project funds, which are restricted by state law, to pay for unallowable expenditures.
    • The School Board and District management have not implemented sufficient policies and controls to ensure the District complies with state laws, its own policies, or addresses concerns identified in prior audits.”

    You can vote no confidence in the Superintendent Maria Goodloe-Johnson here: http://www.PetitionOnline.com/S3B62010/petition.html

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  17. (Reverse) racism is alive and well in Seattle.

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  18. The race card? Really? And it had been such an intelligent discussion up to that point.

    The 100-year old neighborhood minority elementary school was closed and put up for bid. It's no stretch that when you are a predominantly white, upper-class, exclusive private school, located in what is a predominatly non-white, lower-class area, you may come up on the short end of the stick when one of the goals for a replacement is to try and return some of what was lost to the community.

    Keep your "racism" for important issues, not because you can't build a ballfield.

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  19. Follow the money. Is it a wonder that voters are reluctant to have their taxes raised to fund education when what is allocated already seems to be squandered? It would be interesting to see the appraisal, under a true fair market value analysis which first considers highest and best use, this site is probably worth $10 million as an apartment site, less if a portion is designated for affordable housing, based on what was just paid for a site in Ballard. This is an asset of the state of Washington - where are the auditors?

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  20. "located in what is a predominatly non-white, lower-class area, you may come up on the short end of the stick"

    Have you been to the area around the school? It is predominatly non-black, and not lower-class. Just because the name is Martin Luther King does not mean a black neighborhood.

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  21. Oh, it's reverse racism when a rich private school can't tear down worn but usable classroom space to build (just what Seattle needs) another soccer field? You people are incredibly myopic.

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  22. Most of the FAME youth activities listed in their proposal revolve around the basketball court, they will use the rest for office space.

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  23. What part of this did DR.Brooks play? Seems that the upper level of the school system have ties to AME. Now he works for them at MLK after he retired in DEC of last year from the school system. Who payed for the letters sent home with the school children ? Was it the tax payers.

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