Are closed Philadelphia schools really worth $200 million?
by thenotebook on Aug 21 2013 Posted in Latest news
by Elizabeth Fiedler for NewsWorks
Sell off closed schools to help keep other Philadelphia schools open.
In essence, that's the idea being pushed by City Council President Darrell Clarke.
Philadelphia public schools are expected to open on time, despite continuing squabbles over funding. But City Hall politicians are still battling over how to pull together the $50 million in city aid they promised Superintendent William Hite would be there in time for schools to open on Sept. 9.
In one corner is Clarke, who points out that the Philadelphia School District has a lot of empty real estate on its hands, thanks to the closing of 29 schools.
Council President Clarke said he wants the city government to pay the schools $50 million upfront for the real estate, then broker the individual building sales itself. The councilman cited an estimate that the school properties could be worth $200 million, combined. In the other corner is Mayor Michael Nutter, who now supports extending the sales tax and borrowing $50 million against the future proceeds as the most timely, doable idea for providing funds immediately. Clarke argued that his plan is a lot better than Mayor Nutter's preferred option: borrowing against future revenue from a city sales tax increase.
"Bottom line? You have $200 million in assets that you're interested in getting rid of," Clarke said. "Why would you go out and borrow $50 million if you have the ability to sell a significant portion if not all of that $200 million in assets? It's just simple math and simple real estate sense."
Mayor Nutter countered that Clarke's plan is far riskier than the Council president thinks.
"It is not appropriate for us—the city government—and its taxpayers to take on these properties," he said, arguing that the $200 million valuation that Clarke cited is inflated. "We know virtually nothing about these buildings. We don't know their value, don't know what condition they're in, don't know who's interested in them, don't have them on our books and our inventory."
Clarke countered that he already knows of interested buyers for at least eight schools, including one he's been working on in his district and four in Councilwoman Jannie Blackwell's district.
Clarke said three of the interested buyers are ready to work out a deal and fork over a check.