No deal : UA withdraws offer to purchase Fayetteville High School
Posted on Friday, August 22, 2008
BROOKE McNEELY Northwest Arkansas Times University of Arkansas Chancellor G. David Gearhart announced Thursday that he was withdrawing an offer to buy the 40-acre Fayetteville High School campus for $ 50 million.
What could have been the largest real estate transaction ever involving the University of Arkansas or the Fayetteville School District apparently won't happen.
UA Chancellor G. David Gearhart announced Thursday that he was withdrawing an offer to buy the 40-acre Fayetteville High School campus for $ 50 million.
"We feel we have been very open about this. We think it was a fair offer," Gearhart said. "We want to be good neighbors. We're just out of the business of buying it."
The Fayetteville Board of Education had hoped to sell the school to the neighboring university campus and use the proceeds to help subsidize the construction at a new campus elsewhere. The last cost estimate for building a new school that the district received from its architecture firm was around $ 92 million.
In May, the school board voted to offer to sell the campus for $ 59 million, an in-between amount of the district's estimated value based on two appraisals. The UA countered with the $ 50 million in June.
Despite the price difference, Gear- hart maintained it was a fair offer given the estimated cost to upgrade the buildings for university purposes and that the purchase was intended as a long-term investment to address facility needs 25 to 50 years in the future.
He said they will now focus on other building and capital improvement needs on the campus. Gearhart is an FHS graduate, but he has said his connections to the school had no influence on the decision one way or another.
"We don't feel under any obligation to be providing a high school to the people of Fayetteville," Gearhart said Thursday. "That's not our job. We made our best offer. We just want to move on."
The school board's next meeting is scheduled to be held Thursday, Aug. 28. The high school situation will likely be discussed under a section devoted to discussing capital projects.
Superintendent Bobby New issued a statement Thursday afternoon stating that he would not be commenting on the university's decision until he receives direction from the school board on the next steps.
"The administration is prepared to support the Fayetteville Board of Education's direction concerning a capital improvement plan that they feel is in the best interest of the Fayetteville School District," the statement said.
When the UA Board of Trustees authorized the $ 50 million offer in June, one of the trustees had asked Gearhart to consider putting a time limit on its acceptance.
Gearhart opted not to include a time limit, leaving the offer open-ended. Even so, he said he believed the process was going on too long, with no end in sight for several more months.
He had initially been discussing the matter with New, but within the past month, most of his conversations on the matter were with Board President Steve Percival, he said.
Percival said he was disappointed with the UA decision, saying that he thought they were working out the details of the lease-back agreement. The UA had suggested that once the sale took place, the school district should pay a lease fee back to the university while it waited for a new school to be built.
Bill Schreckhise of Build Smart, a group that supports keeping and retrofitting the current site, said he hopes the UA's decision puts the focus back on current site options.
"We are glad to see the university is discontinuing negotiations, and we consider this an opportunity for the school board and school district to start looking toward the future and begin discussing building a world-class facility on the current site," Schreckhise said. "We're hoping that they pursue a millage increase to completely rebuild the FHS campus on the current site. We think the options to do so have been largely overlooked."
Judy McDonald of Students First, a group that supported building a new school elsewhere, said the prospect of selling the land to the UA was "an incredible and unusual opportunity," and she was very disappointed the deal did not transpire.
"We have all agreed that Fayetteville must have a new high school and soon. Now, the only choice is for the school board to ask the taxpayers of Fayetteville to fund the entire cost," she said. "(Even ) with lease-back costs, the university purchase would have given the district $ 30 million, plus or minus, toward the cost of the project."
The process of debating the future of the school has been laborious for the district's constituencies and school board members. It has included two different committees over two years, the formation of two independent groups with different perspectives on changing locations, public meetings and workshops, resolutions by the city of Fayetteville and the Chamber of Commerce and numerous meetings devoted to the topic.
Even with a $ 50 million sale, the district would have needed to hold a millage election to raise the rest of the revenue to complete the project. The election could not have been held until 2009 because of current election time frames.
The most recent FHS Select Committee recommended the school be moved from its current location to 73 acres on Morningside Drive in south Fayetteville. After the recommendation was received, the school board made voted 6-1 to offer to sell the school.
Becky Purcell, the board member who voted against selling the school to the university, said Thursday she had no comment on Gearhart's decision.
"I'm a little surprised, that's all," board member Conrad Odom said. "I didn't know there was a deadline, and I didn't see that coming. I can certainly understand their position."
Board members Tim Kring and Tim Hudson said with this development they would like to turn the focus to options for improving the current site. Hudson said it may be time to focus on the current site and take care of some of its deficiencies.
"I'm looking forward to building a new structure at the current site," Kring said.
"It's so amazing what high schools look like now," Schreckhise said. "Now, new high schools are so awesome. I really want to see that awesomeness conveyed to the current FHS site."
In June, a group involving Springdale developer Gary Combs announced through an attorney that it was willing to pay $ 60 million for the site, trumping the UA offer. The group later withdrew its proposal the following month, and the UA said at the time its $ 50 million offer was still on the table.
Now, the process has been going on for nearly three months since the UA proposal was first made, he said. The UA had planned to implement a tuition increase to fund the cost of the land purchase.
"I don't feel we're making the decision for them," Gearhart said. "Frankly, we think they should have accepted it (the $ 50 million )."
Asked if there was anyone who should be blamed for the negotiations not coming to fruition, Percival said," I don't think blame is the proper reaction."
"They have offered $ 50 million and have now offered to retract it," Hudson said. "The district came up with an amount that we thought was a fair amount based on an amount between the two appraisals."
The board could opt to build a new school elsewhere without a sale pending on the current property, as the estimated tax increase for a new site without a sale subsidy has been within 2 mills of some of the architect's estimates for a complete retrofit of the current site. The present school was first built in 1952.
McDonald said they do have supporters that believe the best option is a new site regardless of cost, but she doesn't believe the current board members will take that option seriously. Furthermore, she said, such a proposal will be a very tough to sell to the voters.
"Especially when they've turned down $ 50 million," she added.
"I would say that nobody's really to blame. The property is so valuable that even an entity as large as the UA could not muster the resources to buy that piece of land," Schreckhise said. "At the end of the day, they just couldn't afford it. I hope this makes the Fayetteville School District realize what a huge gem the current property is and do all they can do to exploit it to get the facility we deserve."
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