School district unveils new plan for selling off properties

Over the next three years, the School District of Philadelphia plans to close as many as 50 school buildings. The targets – which schools, which neighborhoods – for now remain largely unknown.

But no matter which buildings go dark, the closings seem certain to have a significant impact on the communities they serve. Schools, after all, are much more than buildings where children learn how to read and write. They are neighborhood anchors – often with imposing physical presences – that double as community meeting spots, informal rec centers and more.

In an apparent acknowledgement of that, the School District is weighing a new “adaptive reuse” policy to govern sales of these properties that – at least in theory – would put community need  ahead of the profit motive.

Unlike the existing policy, where the district’s goal is “to achieve the maximum market rate value in the sale” of property, the proposed new rules would offer discounts of up to 25 percent off the market value for would-be educational buyers, such as a charter school. Non-profits and community service providers – a faith-based charity, for instance, or a CDC – would be eligible for discounts of up to 15 percent, at the district’s discretion.

Developers and other private-sector buyers would not be eligible for discounts, at least not according to the draft policy.

“We’re going to engage the neighborhoods and the communities that are most impacted and most invested in what happens to those buildings when they’re no longer in the inventory of the school system,” superintendent Arlene Ackerman said at a special School Reform Commission meeting last week.

When asked why the district would offer discounts on property at a time when it is facing an enormous deficit, Ackerman said that the profits from property sales – roughly budgeted for $12.5 million next year – are not near enough to close the $639 million gap.

“This is a small part of it so we’re going to do this in a way that’s not going to be driven by the money first,” Ackerman said.

For each property it sells, the district intends to solicit a “request for information” from all would-be developers, including non-profits and educational organizations. According to the draft policy, applicants would need to explain their projects, document their capacity to develop the property and show that they have the financial capability to buy and develop the land.

Before vetting proposals, the draft policy requires the district get a property appraisal and determine what sort of buyer – educational, non-profit or private – would be the best fit for a given parcel. While some of the properties would no doubt be of interest to private developers, they are likely to be many others that have far less commercial potential.

“There’s a sense that these properties all will have the same amount of commercial viability and appeal, and that’s not true,” said District Deputy Superintendent Leroy Nunery at last week’s SRC meeting. “You can’t turn them all into condominiums.”

Development proposals for each property will be reviewed by an “evaluation team,” comprised of up to three district representatives, two to four community representatives, one Nutter administration representative and one representative from the district council member’s office. On a “case by case basis” a designate from the local state representative office will be included on the teams as well, according to the draft policy, a provision that seems designed to give figures like State Rep. Dwight Evans an opportunity to influence the sales.

It is up to the evaluation teams to score each proposal, and make a recommendation on which applicant should get the property to the SRC. It is not yet clear what standards evaluation teams will use to determine which developer to recommend. For instance, the policy makes no mention of the possibility that similar buyers – two charter schools, say – might bid for the same property at different levels. In that instance, would the higher bid win? Or would the evaluation teams give greater weight to other factors?

What’s more, for all its gestures at inclusion, the policy leaves the district firmly in control. For instance, the policy offers discounts only to charter schools that agree not to increase their enrollments. The district also retains the authority to hand properties off to the city if it can’t find a buyer it likes.

What’s more, the district reserves the right to select the members of the evaluation teams. The policy states that “the superintendent’s office will nominate and approve the members” of each evaluation team. It remains to be seen how willing district council members will be to let the district determine who sits on the teams. More broadly, it is unclear if the draft policy as written can ensure that the best development prevails, as opposed to the most politically-connected developer, be it non-profit or private.

“It’s going to be hard,” Nunery acknowledged. “I’m not from Philadelphia but I’ve been here long enough to know that the influence is going to be heavy. If you do the scoring properly, if you do it openly and transparently from the very beginning you can abate some of the risk.”

The SRC is expected to vote on the proposed policy at its May 18 meeting.

Contact the reporter at pkerkstra@planphilly.com