|As promised, I am writing to share with you an update regarding a review of GCPS land acquisitions by the Atlanta Journal-Constitution and by the independent third party hired by the Board of Education.|
- The independent, third-party review of GCPS land transactions by attorney Joe Whitley is well underway. I have directed staff to cooperate thoroughly, providing the information, files, and background needed to conduct a thorough audit of these purchases and our site acquisition processes. It is anticipated that Mr. Whitley and his team will complete their review in the next few weeks and will provide a final report on the findings to the members of the School Board. This report also will be made public at that time.
J. Alvin Wilbanks,
Gwinnett County Public Schools
- In my April 1 communication to you, I referenced proposed changes to our land acquisition policy. In keeping with our procedures for proposing and approving changes to School Board policy, the proposed changes were shared at the April 21 Board meeting and are undergoing further review. I invite you to be a part of the revision process. You may view the proposed changes on the school district's web site and send your feedback to MySchoolBoard@gwinnett.k12.ga.us.
- The Atlanta Journal-Constitution is continuing its focus on Gwinnett County Public Schools this Sunday. Despite the newspaper’s efforts to link GCPS’ land purchases to those of the county, the two are not related. We have provided the newspaper with much more information than it can include, therefore I am providing you the reporter's questions and our full responses that relate to Sunday’s story. I do this as part of my promise to keep you up to date on this issue, and also because I value the trust you have placed in our school district. Therefore, I want to be sure you have the facts as we have provided them to the reporter.
Again, I thank you for your continued support of our schools. Please know that I will continue to provide updates as appropriate to keep you informed on this issue.
The questions below were directed to and answered by Jim Steele, the district’s Chief Operations Officer.
Questions Received from the AJC: 4-18-11
Answers Sent: 4-28-11
1) The executive session minutes you provided me show that the school board’s vote for this school land purchase was on Aug. 9, 2007. I wanted to confirm that the land identified as site “A” in the executive session minutes was, in fact, the 103-acre parcel ultimately purchased from D.G. Jenkins Development Corporation.
Yes, Site A was the 103 acre parcel.
2) Why did Mr. Steele’s department choose this piece of land over the other two that were presented to the school board? Why was this a more suitable tract of land?
After careful analysis, our Land Acquisition Team determined this parcel was the only one that had County sewer service. Additionally, we purchased a middle school site and enough land for support services in that side of the County. We are planning for a large district maintenance facility as well as bus parking, storage area, etc. that will serve the entire eastern side of the County.
3) My records show this site was tentatively named Archer Cluster Middle School. Has the school district given it an official name yet? If so, what is it? This school site does not have an official name yet as this school has not been built yet.
4) This property was purchased in May 2008 from D.G. Jenkins Development Corp for $6.9 million. The man who sold that land to D.G. Jenkins Development four and a half years earlier for $2.08 million, John Lovin, said the price paid by the school district was “astronomical” and “unreasonable” and should never have cost that much. How do you respond to those comments?
The developer purchased farmland which did not have County sewer service. When Mr. Lovin owned the property it was unimproved rural, agricultural property that would have been valued 4-1/2 years earlier at a much lower price than the improved property we purchased. This land was the only parcel in this area of the County that was going to have the much desired sewer service. Additionally this area of the County is very rocky and this site's geology tested out well. The property will be a very cost effective site to develop.
As we have told you previously, pursuant to our policy, we hired two independent MAI appraisers, the highest designation known in the appraisal industry requiring the most professional training and experience, to determine fair market value for the real estate. School Board policy does not allow staff to be involved in setting land values. Please note that in earlier correspondence we have communicated to you that in 91% or 10 out of 11 land acquisitions that went to Court, the Courts raised our highest and best use fair market value by 31.8% for the total Court rulings. This should indicate that, if anything, our appraisals may have been too low. Nevertheless, the appraisals are professionally done by fully licensed, top rated, experienced and reputable professionals.
When we get our records back we can confirm what we actually paid for the property and compare it with our appraised value but we believe we purchased this property for considerably less than the highest and best use fair market appraised value. We will confirm exactly how much we saved when we get our records back.
5) The school district agreed to buy this land for $6.9 million “with sewer rights included,” according to documents in the land purchase file. Does that mean the school district would have been required to pay for any remaining sewer work? Or that Jenkins would have footed the bill? Please clarify.
We purchased this property with sewer service and capacity that we needed. The system has been completed and turned over to Gwinnett County Public Utilities. The financial commitments to the County associated with the sewer service of this property have been satisfied.
Questions Received from the AJC: 4-22-11
Answers Sent: 4-28-11
1) Two real estate experts who examined this purchase for the AJC said that the school district overpaid for this property. They both, independently, came to the conclusion that the fair market value of the property at the time of the purchase was no more than $50,000 per acre. (The school district paid $67,000 per acre). What is your response to that?
Pursuant to our policy, we hired two independent MAI appraisers, the highest designation known in the appraisal industry requiring the most professional training and experience, to determine fair market value for the real estate. We bought the property at almost $2 million less than the highest and best use fair market value appraisal. School Board policy does not allow staff to be involved in setting land values. Please note that in earlier correspondence we have communicated to you that in 91% or 10 out of 11 land acquisitions that went to Court, the Courts raised our highest and best use fair market value by 31.8% for the total Court rulings. This should indicate that, if anything, our appraisals may have been too low. Nevertheless, they are professionally done by fully licensed, top rated, experienced and reputable professionals.
We have no way of knowing whether you are talking about a realtors opinion when you say "real estate expert" or whether they did any analysis that was germane to the time era. One could probably go down the street and get "real estate experts" to give all kinds of opinions and the results could be all over the board. We have no way of knowing whether or not your "real estate experts" knew about this property being sewered and whether or not they used comparable land sales at the time, whether or not they used apples to apples with comparisons. Additionally, we think that our appraisers took into account that the property had been rezoned and platted for dense development and was, at the time, in the process of being developed with entrance way, etc. It should be noted that this is an area of the County where there is hardly any sewer at all available and this property has sewer.
2) You have previously told me that, depending on a number of factors, the school district prefers to have “up to 50 acres for a middle school” site. As you know, the land purchased from David Jenkins totaled 103 acres. Why did you deem it necessary to buy so much land for a middle school?
We purchased a middle school site and enough land for support services in that side of the county. We are planning for a large district maintenance facility as well as bus parking, storage area, etc. that will serve the entire eastern side of the county.
3) This land was purchased in May 2008, but the district will not build a middle school on this property until 2013 or 2014. Why did you deem it necessary to buy the land at that time, when the school would not be built for another five or six years?
We always try to and prefer to acquire future school sites before they are needed. This is a sign of good planning and organization.
Questions Received from the AJC: 4-26-11
A Sent: 4-29-2011
1) Did you buy this property to bail out the developer who no longer wanted this land and no longer planned to build a subdivision on it?
Absolutely not and your question is insulting. No one on our Land Acquisition Team is anything other than a professional. Since we bought this property in May 2008, very little development has gone on because of the recession. We challenge you to find a better site that will meet the State's very stringent criteria for schools. This school will be located exactly where it is needed. The development costs for the land will be lower than average and we bought it at almost $2 million less than appraised fair market value. It is, in fact, one of the better school sites that we have been able to acquire.
2) Has the school district put any money into water or sewer improvements at or around the property that it purchased for Archer Cluster Middle School? If so, how much? For what improvements?
We purchased this property with sewer service and capacity that we needed included in the purchase price. In fact this is one of the big factors in one of your earlier questions about how the value of the property increased in the 4-1/2 years between the sale by the farmer and our acquisition. The whole side of the County where this site is located has no sewer service, other than what we bought, nor is there any planned. Sewer service for our needs at this school site was essential. The sewer system was completed and was turned over to Gwinnett County Public Utilities. The financial commitments to the County associated with the sewer service for this property had been satisfied.
Additionally, with regards to your question of how the property value increased in the 4-1/2 years mentioned above, please note that there would have been no way that the County would have rezoned the property from farmland to very high density (232 planned single family lots) without there having been a requirement for sewer service.
With regards to water, when we bought the property there was a 12-inch water line. This will provide for the necessary fire protection and water service to the school.