The majority of Pontiac’s vacant schools were sold this week for $800,000 in a deal that some involved say could have used more homework.
The Pontiac Board of Education voted Monday to sell eight closed schools in two groups to Pontiac Investment, LLC. The deal is now in a 45-day due diligence period, according to the district.
SEE PHOTOS OF PONTIAC SCHOOLS OVER THE YEARS
Realtor Rod Blake indicated that the buyer plans to develop residential housing on the properties, said Board of Education President Karen Cain.
The district, which is in a consent agreement with the Michigan Department of Treasury, needed to sell the vacant schools to eliminate liability and return the properties to the tax rolls, Cain said.
Many of Pontiac’s closed schools are vandalized and fire-damaged.
Crofoot Elementary, Perdue Academy, McCarroll School and Jefferson/Whittier School were sold together for $500,000.
Emerson Elementary, Longfellow Elementary, Washington Middle School and Webster Elementary were sold in a lot for $300,000.
The Board of Education did not meet directly with the buyers and is unsure of who they are, said Secretary Caroll Turpin.
“I am concerned we sold the properties, and when you sell (them) to an investment group, you don’t know who the buyers are,” Turpin said.
Blake, the district’s real estate broker, said the buyers have declined to comment on the purchase until they’ve completed their due diligence period.
The broker said he completed the task he was asked to perform: Finding buyers for the district’s properties.
“There was never an expectation and there was never a request by the board that they meet with these buyers, because of the schedule and the commitment to honor the obligation of the consent agreement,” Blake said.
Pontiac Investment, LLC has a Northwestern Highway address in Southfield, according to Pontiac School District spokesman Stephen Lipsen. The company couldn’t be reached for comment.
The district declined Thursday to provide the purchase agreement for the vacant schools on the basis that it hasn’t yet been signed.
The deal is expected to close by June 30, Lipsen said.
Superintendent Kelley Williams said the real estate sale allows the district to meet the revenue targets set in its financial and operating plan.
“We did do our due diligence through our broker to ensure it would be something that would lift the community,” Williams said. “We did ask those tough questions.”
Second bidder planned investment of ‘millions’
Pontiac real estate developer Bob Waun’s ReFund bid $472,000 cash for Crofoot, Perdue, McCarroll and Jefferson, $28,000 less than the winning bid for the four schools.
ReFund’s bid was accepted as a backup offer if the first deal falls through, both Waun and Cain said.
ReFund’s plans include medical offices at Crofoot, a farm-to-table operation at Jefferson and a facility to recycle salvageable building materials, Waun said.
“I felt they really had not done proper due diligence on the offers, because ours came with a bunch of jobs that would have increased the tax base in town,” said Waun, who is among a group of investors who have renovated the Indian Hill building on Saginaw Street and purchased numerous other downtown properties.
ReFund’s investment in the school properties would have amounted to “tens of millions,” Waun said.
Cain said the Board of Education would have had more time to evaluate offers if the bids were received earlier.
“It was primarily because we had time restrictions,” she said. “The board did not have the luxury of being able to analyze any bids that were given, as far as the potential to be the best fit.”
‘Hard decisions’
If the properties weren’t sold, the district’s options included an auction or turning the buildings over to the Michigan Land Bank or the City of Pontiac, Cain said.
“I’m very happy about it, primarily because the buyers were interested in either the current buildings, to develop into a multifamily-type concept, or to build new housing, which will benefit the community.”
The district had a Jan. 31 deadline to sell the properties as part of its real estate plan, and the deadline was extended as offers were made and negotiated, said Consent Agreement Consultant Don Weatherspoon.
“The buildings have been sitting for several years because the asking prices were something the market would not respond to,” Weatherspoon said. “There were some hard decisions that had to be made by the board, and I applaud them for that.”
The Pontiac School District signed a consent agreement with the Michigan Department of Treasury in late 2013 to restructure its finances and academics. The district’s budget deficit has been slashed 24 percent in the year since the signing of the consent agreement, from $51.7 million to $39.1 million.
The district has been given an additional 60 days to develop a plan for Lincoln Junior High School. A private sector partner could potentially restore the school to “boost” the neighboring International Technology Academy, Weatherspoon said.
The Fairlawn Center property near the former Clinton Valley Center was sold last year for $650,000 to a different firm, the district said Thursday.
Additional time will be taken to market the district’s Hawthorne property on North Telegraph Road, Weatherspoon said, and plans have yet to be determined for three additional sites: The Bethune School, the Fells Center maintenance facility and the Odell Nails Administration Building.
