FAYETTEVILLE : 4 developers withdraw bid on high school
Posted on Thursday, July 24, 2008
A development group withdrew its $ 60 million purchase option for the 40-acre Fayetteville High School campus Wednesday.
The move came the day before the Fayetteville School Board was scheduled to consider the issue.
Campus Building Group LLC, composed of four real estate developers, delivered the offer June 26 after six weeks of informal discussions with district Superintendent Bobby New.
The group proposed building a mixed-use project with university student housing and retail. The purchase offer came with a 90-day window that would expire Aug. 26, giving the investment group exclusive rights to purchase the property.
David Fisher, the group’s attorney, was scheduled to meet with New on Wednesday. He instead called the superintendent and told him the group was no longer interested in the property. The developers didn’t provide reasons for their decision, New said.
“Apparently, the [company ] has had a change of heart,” he said. “They felt like, at this point, that they just didn’t need to go forward. It’s all part of doing business in this real estate market plus the soft economy.” Fisher didn’t return messages left at his offices in Rogers and Springdale. He has refused to name the group’s four investors.
Campus Building Group is registered with the secretary of state’s office at 1589 Electric Ave., in Springdale. That’s the same address as Basic Block, a company operated by developer Gary Combs.
Reached by phone Wednesday, Combs declined to comment on his involvement with the group or reasons for withdrawing the offer.
The developers’ withdrawal leaves just one offer for the property — $ 50 million from the adjacent University of Arkansas at Fayetteville.
On May 29, the School Board voted 6-1 to offer the 40-acre property to UA for $ 59 million, a price set between two appraisals, one for $ 61. 28 million commissioned by the district and $ 56. 4 million from UA. At that meeting the School Board voted to begin negotiations to purchase land for a new high school campus off Morningside Drive and Huntsville Road.
UA System trustees approved the $ 50 million offer at their June 6 meeting and didn’t give a deadline for acceptance. After hearing about the $ 60 million offer last month, UA Chancellor G. David Gearhart said the university likely would remain firm in its offer.
The School Board voted June 26 to postpone further negotiations with the university, pending more details about the feasibility of building a high school on a new site with the money generated from the sale.
Decisions regarding the university’s purchase plans likely will depend on conditions of the offer, such as leaseback options, New said.
“Our response here is to develop a strategy based on whatever options the board feels we have,” he said. “The simplicity of the offer is much more complex underneath the trustees’ decision.” The sale could yield more or less money for the district depending on interest rates and the amount of time the high school can remain on the campus after it’s sold, New said. Architects estimate it will take four to five years to design and build a school.
Proponents of selling the high school argue that the sale will give the district a large down payment on a larger campus elsewhere. Opponents argue that remodeling the school on its current site would be more efficient.
To accept the $ 50 million offer, the board should be sure that the money gained from the sale would be enough to offset the cost of building and minimize the amount required in a millage campaign to finance the sale, New said.
“If we get down in the range of 20 to 25, maybe even 30 percent of the total cost being supported by a university offer, I just think it’s too risky,” he said, noting a difficult economic climate that might make voters less receptive to large property tax increases.
After New presented the developer’s offer to the board last month, opponents suggested it could be a scheme to pressure the university to offer more for the property. New denied the allegation. “I started in this business to be a schoolteacher and not a real estate tycoon,” New said. “The people who would conceive a conspiracy or a manipulation of the university’s offer give me far more credit for being divisive than I deserve.” To contact this reporter: eblad@arkansasonline. com —————— • ——————Information for this article was contributed by Tracie Dungan of the Arkansas Democrat-Gazette.
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