Philadelphia School District Has a Lot of Real Estate to Unload
By Kristen A. Graham and Troy Graham
The Philadelphia School District is close to deals on several of its recently closed buildings, officials said Wednesday.
Four buyers would scoop up the properties, netting the district about $25 million -- well under the target it must meet to cover the city's $50 million outlay that helped schools open on time last fall.
If approved by the School Reform Commission, Douglas High School in Port Richmond would be sold to Maritime Academy Charter School. Shaw Middle School in Southwest Philadelphia would go to Mastery Charter School.
Alexander Wilson Elementary, also in the Southwest section of the city, would go to Orens Bros. Real Estate Inc. for a mixed-use residential and retail development.
And the giant, valuable complex encompassing the former University City High, Drew Elementary, and the Walnut Center would sell to Drexel University Development, a joint venture of the university and Wexford Science & Technology L.L.C. Planned there is a mixed-use development of residential, retail, educational, lab, and office space.
The district did not disclose the value of each individual deal. In all, 20 offers were received for the schools. There were multiple offers for each building, officials said. An advisory committee of district, city, Philadelphia Industrial Development Corp., and Philadelphia Redevelopment Authority representatives helped review the bids.
One other vacant school that had been offered for "expedited sale" by the district, Harrison Elementary, at 10th and Thompson Streets in North Philadelphia, remained unsold.
Twenty-one more district schools closed in 2012 and 2013 are not yet formally for sale. The district has received "expressions of interest" for those, and negotiations are ongoing. Among that stable of properties is the valuable William Penn High building, on North Broad Street.
If the SRC signs off on the four deals at its March 20 meeting as planned, the sales would gross about $35 million. But fees and bond payments would net the district about $25 million.
The district, however, is counting on $61 million from building sales by June 30. Officials had already built $11 million from property sales into the 2013-14 budget, and the city's $50 million pledge that allowed schools to open on time hinges on building sales.
District spokesman Fernando Gallard said the district hoped to make up the $36 million in further property sales by June, but acknowledged that the system may not be able to pull off enough deals by then. If that happens, the district isn't on the hook, he said.
"The money would come from the City of Philadelphia," Gallard said. Relying on building sales to cover the city's $50 million pledge was a point of contention for Philadelphia's leaders.
Mayor Nutter had wanted to borrow the money against future collections of the city's extra 1 percent sales tax.
Council President Darrell L. Clarke wanted the city to give the district the funds in exchange for school buildings that could be sold to pay the city back. He was skeptical of the district's ability to sell the buildings quickly enough to raise $61 million by June.
"That was the concern of the SRC and the city not adopting the plan we suggested," Clarke said.
Nutter spokesman Mark McDonald said officials "are continuing to work on the mechanism that would provide the already promised funds to the district."
If the district does not arrive at $61 million by June, it appears that Nutter and Clarke could find themselves repeating the same battles to cover the shortfall.
Some of the properties for which deals are close will remain educational sites. Shaw Middle is already home to Mastery Charter's Hardy Williams High School.
Officials from Drexel did not return calls seeking comment.
Scott Orens of Philadelphia-based Orens Bros. said he could not go into details of the Alexander Wilson School project, but offered: "We're excited about the opportunity to develop the site. I think it's fantastic, and I look forward to developing it to everyone's satisfaction."
KIPP Philadelphia had expressed interest in purchasing the Alexander Wilson site. Officials could not be reached to comment on the sale to another entity.
(c)2014 The Philadelphia Inquirer
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