Top officials in the Bettendorf School District were discussing whether to close Thomas Jefferson Elementary School months before a decision was made.
“Prior to the August vote, I did speak with Ryan [Fick of Mel Foster] about that property, started looking at prices of property, in case the board did approve to consolidate the two buildings,” Superintendent Mike Raso said in a closed meeting Oct. 8.
The board unanimously approved a consolidation between Mark Twain and Thomas Jefferson Elementary Schools at the end of this school year, which turned contentious for the Jefferson community. While the school technically closes at the end of this school year, it will still be used for at least the first half of next year to house students while construction on the new Mark Twain building is completed.
Ultimately, the district announced its plan in April to sell the Thomas Jefferson Elementary School property to Applestone Homes. While the company is paying $100,000 for the property, that money will immediately be paid into an escrow account, and they are set to receive a $10,000 rebate for each of the first 10 homes that are ready for occupancy, provided they’re move-in ready by Dec. 31, 2028. After that date, any money left in the account goes back to the district.
While Iowa Code allows for closed meetings to discuss the sale or purchase of property, the minutes and audio become public once the agreement is official; the district on Wednesday shared minutes and audio from five closed meetings between March 19, 2018, and April 15, after Applestone had signed the agreement.
Here’s what they talked about.
Short-term versus long-term revenue
“As long as we don’t lose money, we should walk away smiling,” Director Gordon Staley said at the Oct. 8 meeting. “... I don’t think this is money-making for the district.”
During the Oct. 8 meeting, those present threw out anywhere from $200,000 to $250,000 as a possible sale price for the Jefferson property, but even then the board was looking to bring in more tax revenue — and potential students — for the district.
“It’d be nice to make $150,000, $200,00 on it, but if we can break even, then I say we get out,” Staley said.
Director Andrew Champion said the Neil Armstrong Elementary property that was sold to a California-based church was a “lesson learned.”
“One of my biggest concerns with leaving the building standing is someone comes and buys it and we get another Armstrong — a building that sits there for 10 years and nothing happens to it,” Champion said at the Oct. 8 meeting, adding that he thinks removing the building should be in any contract. “I think, as a board, our goal needs to be getting that property to tax-paying property.
“Especially in a district with our closed boundaries — what would have happened if Armstrong had been sold with the condition of being demoed? There could be housing there now, and that could be feeding our schools and our enrollment.”
Raso said this week that because schools are such a “specific purpose,” they’ll never make a “bunch of money” on a sale.
“Down the road, we get families and the tax base in there,” he said.
By the next closed meeting on the Jefferson property, Dec. 20, the board had moved to discussing the best way to make sure the property sale would benefit the district in the long-run, by increasing revenue from property taxes and attracting families.
Board President Adam Holland said he thought it would be best to have the district’s attorney draw up a request for proposals, rather than list the property with a real estate agent who would need commission.
“We’re still going to have to hire a lawyer,” he said. “At that point, we distribute for RFPs. Most developers are looking for these anyways.”
The need to develop the land into something else continued to be reiterated.
“That standing building will haunt this district” Champion said, while other Dec. 20 meeting attendees can be heard agreeing. “It will come back to bite us.”
The other bidder
Bettendorf received two bids at the March 18 closed meeting: one from Applestone, proposing single-family homes, and one from Sagic, proposing townhomes. Both were offering $100,000 for the property. Applestone’s proposal, though, included a rebate from the district of $10,000 per home for the first 10 homes; Sagic’s did not, but its proposal would require the property to be rezoned by the city for multi-family homes.
Even in October, before any bids were put in, the board and administration noted issues with multi-family homes on the land.
“I don’t know what the rules are about how big or how small those lots could be, but there would need to be a zoning change to get condominium-types,” former Finance Director Dallon Christensen said.
“I don’t think there’s any appetite for rezoning down there,” said Champion, who lives in the Jefferson neighborhood. “That’s coming from a neighbor.”
Further, the board was concerned about the “capacities beyond a cover sheet” with the proposal, which was littered with typos and misspellings, including two different spellings of “Sagic.”
Ultimately, the board settled on Applestone Homes, even with the rebates.
“They pay $100,000. They cover demolition. Then we rebate them up to $100,000 back for the price they paid us. But we’re off the hook for demolition and abatement,” Champion said. “And, in the end, the developer has some accountability for getting stuff built down there, rather than letting it sit vacant and not paying taxes, or minimal taxes, and we also hopefully have the incentive of kids moving.”
In Applestone’s initial proposal, there was no deadline for when the first 10 houses had to be completed in order to earn back $10,000 each, which drew some concern from the board.
At the March 18 meeting, Champion suggested there needs to be a time frame for the money to be returned back to the district, so it’s not just sitting in an account somewhere for “80 years.”
Still, the board noted that Applestone’s subdivisions have usually been pulled up in three to five years.
“This is not his first rodeo,” Staley said.
While several board members were skeptical of, or even irritated by, the rebates, no one strongly advocated that they push to eliminate them from the contract.
This week, Raso said the rebates were reasonable because the developers were taking on “some risk” with the project.
Some of the board’s other concerns were addressed and returned for discussion on April 15.
“It appears to me that this has addressed, as far as its possible, the counter-offer requests,” Vice President Richard Lynch said.
Now, there’s some pressure for Applestone to get houses up as soon as possible — after Dec. 31, 2028, any money left in the district’s escrow account returns to the district.
“If they don’t demolish, they don’t get the money,” Lynch said. “If they don’t build single family lots, they don’t get the money.”
David Farmer, board treasurer, estimated that the $100,000 would be earned back in five years, once 10 houses are occupied — and that’s not including any state money for students brought in.
“We’re not giving away everything,” Staley said.