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Flint, MI— As part of Flint Community Schools’ efforts to tackle an $18 million deficit, the board is considering selling all or some of the district’s 22 vacant properties—and they have full legal power to do so, Attorney Gordon VanWieren of Thrun Law Firm told board members at a meeting Wednesday night.
“With regards to Michigan law…. the revised school code provides this board of education very broad authority to dispose or sell excess real estate and buildings. With regards to your district policy, I’ve reviewed it, it’s very good, and it provides broad discretion, again, to allow the board to take action to sell property,” VanWieren, who specializes in public school real estate, said.
FCS has no bonded debt tied to the vacant properties, which makes them much easier to sell, VanWieren said.
Michigan law requires districts to receive “fair value” for their properties, meaning they cannot simply give them away. VanWieren noted this was a different concept than “fair market value.” The former concerns a value of an asset’s intrinsic worth, while the latter refers to a price determined by supply and demand.
The board may determine how they sell or dispose of the properties, VanWieren said.
Since 2009, student enrollment has decreased by 70% and the district has been unable to downsize fast enough, causing severe budget problems.
“We are charged with developing an enhanced deficit elimination plan to do an update to what was approved by the state before,” Deputy Director of Finance Ayunna Dompreh told board members at a budget workshop in late Jan. 2021.
During the budget workshops, board members asked about the possibility of selling the properties as a way to reduce the deficit. Superintendent Anita Steward said there had been some inquires.
One development firm, informally known as the Harvard Group, expressed interest in repurposing and restoring the Central High School-Whittier Classical Academy campus for adaptative reuse, the process of reusing an existing building for a purpose other than originally intended.
Prior to moving forward with any decisions, board members requested an enrollment study, a program study, facility assessments, and appraisals for closed and in-use buildings.
FCS drafted a $48,000 memorandum of understanding—a non-binding agreement—with the Department of Treasury for Plante Moran Cresa, a commercial real estate advisor, to perform the requested assessments.
At Wednesday’s meeting, the board voted to move the MOU to the regular board meeting on May 19 for an official vote.
“The data provided from these services will support the development of the enhanced deficit elimination plan for the district,” Dompreh said.