Lehighton debates Franklin offer
A year after Lehighton Area School District opened its new K-5 building, it appears there is a buyer for the district’s last unused elementary school property.
Lehighton’s school board voted Monday night to hold a public auction Sept. 30 for the sale of Franklin Elementary School. Bethany Wesleyan Church has submitted a $400,000 pre-bid, which will be the base amount at the auction, scheduled to begin at 1 p.m. at the district administration building.
The motion passed by a 5-2 vote with directors David Bradley and Gail Maholick voting no. Joy Beers abstained, while Richard Beltz was absent. Voting yes were Larry Stern, Wayne Wentz, Stephen Holland, Andrew Yenser and Rita Spinelli.
Bradley opposed the motion after asking whether anyone on the board or administration had “calculated the loss of financial opportunity that would come with auctioning the school for $400,000.”
Instead, Bradley suggested a triple net lease, where the tenant pays all the expenses of the property including real estate taxes, building insurance and maintenance.
“Instead, the board is rubber stamping the administration’s decision without any data,” Bradley said.
Bethany Wesleyan Church began renting space in Lehighton Area Middle School in 2018 for Sunday services. At the time, district officials called it a “win-win” and estimated it would bring in over $30,000 per year in income.
Superintendent Jonathan Cleaver said by leasing the Franklin building to the church, or any tenant with an at-will lease, it leaves the door open for that party to end the lease at any time and put the district right back at square one.
“It wouldn’t be what I would consider good financial management on our part,” Cleaver said.
In voting yes, board President Larry Stern said he was taking into consideration the market for the school.
“This is the first interest we’ve had in it in 24 months,” Stern said.
In February, the district approved a subdivision of the Franklin property, which splits the property into two parcels. One parcel, totaling 13.6 acres includes the school as well as the soccer field and track above it. The other parcel, 11.8 acres, went to Franklin Township and includes four baseball and softball fields used by the Franklin Township Athletic Association.
Before the subdivision, commercial real estate appraiser Frank Gownley appraised the property at $759,000.
“Appraisals are out there, but the bids show what people are actually willing to pay for the property,” Stern said.
Franklin will become the fourth former elementary school to be sold by the district, joining Shull-David, Mahoning and East Penn.
Joseph Bennett, using the name Lehighton School Site LLC, posted the successful bid of $402,500 for Shull-David Elementary school during a public auction last month.
He outbid Behavioral Health Associates, which submitted a pre-bid of $400,000, but did not attempt to go higher. Bennett has yet to publicly say what he intends to do with the property.
In November 2017, Lehighton sold East Penn and Mahoning elementary schools for $350,000 each, also at public auction. BHA was the successful bidder for Mahoning, where it now runs the Mahoning Valley Academy for grades 7 through 12. Duane and Lavona Schleicher bid $350,000 on East Penn Elementary.
“We’re planning an adult living complex, a retirement type of home,” Duane Schleicher said following the auction in 2017.
It could be a quick turnaround from the auction to the board approving the sale.
The board on Monday approved changing the date of September’s meeting to 7 p.m. Sept. 30.
“This gives us the opportunity to execute the auction and liquidate this asset on the same day,” Stern said.
Comments
If the buyer had $400,000 cash sitting in a index fund net 5% - 8% per year, the interest alone pays the rent, and has similar asset appreciation over the 5 year term. And, if the buyer has to borrow the $400k, the interest alone is more than the $1000/mo.
A triple net lease would need to be reviewed, but typically can be a win-win for all parties, including the stakeholders. The problem in our district is the attitude of the administration and board. These assets are the district's stakeholders, the board is elected to oversee them and the board employees an administration to execute the orders of the board.
Sincerely,
Citizen David F. Bradley Sr.
As for the separation of church and state, the church was renting the middle school and you should really review the common core curriculum.
Sincerely,
Citizen David F. Bradley Sr.
"This is the first interest we’ve had in it in 24 months,” Stern said.
That is just total BS. if Larry actually said that Larry is playing a sad game of bad politics, and if the TN made it up, their reporting is sub par. We should watch the tape, confirming the term 'interest' was used and not 'offer'. Granted, Larry has been known to mumble, but that statement should be fact checked.
I am happy for the church, what a deal, buy a building for less than they are paying to rent space, pay no real estate tax, and get a perfectly built fallout shelter to boot. Plus park a great asset for instant capital appreciation.
Financially, the district would have benefitted from a five year, triple net lease, for even as little as $1000/mo. Saving the church cash flow, and not squandering the district's asset appreciation to appraisal value.
By parking the assets, maintaining the asset, it would let the hospital get built. Many interested parties looked at this gem of a building, great location in a wonderful community. Some interested parties would bring jobs and tax revenue. Corporations do not always move quickly. Unless some fool is dumb enough to dangle a 'pennies on the dollar' offer, companies typically make cautious, well derived decisions. But, patients is apparently not one of Larry Stern's virtues, nor the others that make up the five stampers. How is this in the best interest of the stakeholders? Or a decision made with fidelity, in review of all the facts?
The church was wise to take advantage of this opportunity. They will own the asset, maintain it as an asset, and reep the instant appreciation value of hundreds of thousands of dollars. If the church paid attention to the feasibility study, and listened to the community, they would be wise to start a charter school. It was well documented the community, families, even staff, liked and wanted to keep the nice, smaller classroom sized, safe, local schools, with shorter commutes and less traffic.
Too bad, the community elected a board to pay for, and then admit they didn't all read the study, with some like Steve Holland admitting he didn't have a copy, but placing a vote non the less. (Srr the video). It would funny if not so sad. That decision and others have caused the budget in Lehighton explode to over $44m with less students, and no real appreciable changes in the state required educational benefits. Open your wallets, this decision to accept an offer, and go to a rushed bid just cost the district money, and weakened its balance sheet.
In perspective, if this is sold, the revenue from all the sold buildings are about 1/5 the stadium spend. So in essence, this district traded $6 million in cash plus PDE's replacement value of $20m, (published replacement value of FOUR safe, local community schools), for some artificial turf and stadium.
Let's make a deal fans would say we got Zoink'd trading $26m in assets for a $7m stadium asset.
The immorality and immaturity, of neglecting the educational needs of a community is not something people of character can put PRIDE in, but these rubber stampers, and their zealots sure found a way.
Sincerely,
Citizen David F. Bradley Sr.
I typically sit at the end of the table, with the camera recording the meeting. Email me and we can meet. All stakeholders should have a voice. Dbradley@lehightongovt.org
Sincerely,
Citizen David F. Bradley Sr.
Be nice, most people can not name all their elected officials.
As we create more transparency, more people are getting involved for the first time. I really want opposing points of view to be expressed. Like at Rita's comments, these views makes it obvious that the logic of common sense prevails.
Sincerely,
Citizen David F. Bradley Sr.
Barbara A Bowes