The Atlanta Public Schools placed an ad in the Fulton County Daily Reporter last week that solicited bids for the sale of the old North Fulton High School property that is currently being leased by the Atlanta International School (AIS). AIS is a private school and has been occupying the property since the 1994 and their lease runs to the year 2051 (see AJC article here). While the ad placed by APS does not mention AIS, there is nothing preventing them from submitting a bid for the property.
Last year the administration proposed that the property be sold to AIS for approximately $8.4 million. The sale price was composed of $6.0 million in cash and $2.4 million in consulting services that AIS would provide to APS for their International Baccalaureate programs (IB). The proposed transaction required Board approval and was controversial at the time, as many of the Board members believed the price was too low.
The potential sale of the property was included in the FY14 budget along with other potential real estate sales. However, APS CFO Burbridge recently indicated that the budgeted real estate revenues were being taken out of the FY14 budget as he did not believe they would be realized before the end of the fiscal period which ends on June 30th. Additionally, there are no real estate revenues included in the FY15 budget currently under consideration by the Board.
In addition, the potential sale was raised again during the Board of Education election when AIS held a town meeting in which two candidates expressed their strong support for the sale. Both candidates lost in the run-off election. Also, in the town hall meeting, AIS representatives indicated that other candidates that were not present indicated that they were in support of the transaction. However, when several candidates were reached for comment, they significantly qualified their support for the transaction (see here).
The ad soliciting bids raises a number of interesting questions, as follows:
- As the solicitation for bids had to be planned in advance, why is the potential sale revenue not included in the FY14 projection or in the FY15 budget?
- Several current Board members were asked to comment – none of the members contacted were aware of the solicitation for bid. Why didn’t the administration let the Board members know in advance that the sale of the property was again under consideration?
I will continue to follow-up on the story and see if we can get more clarification on the administration’s intent and reasons for placing this issue back on the table.
[Follow me on Twitter @Financial_Decon]