Cecil County Cuts Deal to Buy Basell Site for Tech School, but at $4million Price Hike Due to Old ‘3 Amigos’ Political Faction
Like the Phoenix rising from the ashes, a long-debated and much needed expansion of vocational/technical education in Cecil County has been resurrected with a proposed deal, announced Friday by the County Executive, to acquire the former Basell building and its 91-acre property on Appleton Road in Elkton for conversion to a new, state-of-the-art tech school and possible multi-use site for parkland and economic development opportunities.
But past rejections and delays of the project by the old “Three Amigos” political faction of the Board of County Commissioners will yield a quick, nearly $4 million profit to Baltimore-based real estate interests, who snatched the property up a few months ago at a bargain-basement price in the aftermath of the “Three Amigos” group’s refusal even to consider a county purchase last year.
Cecil County Public Schools (CCPS) officials were ecstatic at the revived proposal, which came about in recent weeks in top secret negotiations between CCPS and the new Baltimore owners of the site.
Their efforts were encouraged by the shift to Charter government and the results of last November’s election, which yielded a new majority of political support for moving ahead with the conversion of the Basell building—which already features state-of-the-art science labs– for a new tech school. And the new political leadership has set a quick schedule for action to turn the proposal into reality.
County Executive Tari Moore—who strongly supported the Basell site acquisition as a county Commissioner and in her successful 2012 campaign for County Executive—announced the agreement Friday morning at a press conference in Elkton.
The tech school proposal is “a critical initiative for our community,” Moore said. She noted that the plan met multiple criteria she had established during her campaign for county executive, to promote jobs, education and public safety. She said a key factor is the impact expanded vo-tech education will have on youth in giving them positive alternatives to drug usage. A recent consultant’s report cited the pervasive local drug culture, lack of educational and job prospects for youth, and Cecil County’s ignominious status as having the highest drug overdose rate in the state.
Dr. D’Ette Devine, the county schools superintendent, spoke via speakerphone, saying that CCPS officials believe the Basell site provides “the most affordable and flexible alternative” for expanding vo-tech training for county students. She said school officials were “very excited” about the educational options but also the prospects of multi-uses for the 91-acre site, including creation of much-needed recreation and parkland, adult education offerings and potential business partners at the site. “This is an outstanding opportunity, and it is an affordable opportunity,” she said.
For many years, there have been more students seeking vo-tech classes than the part-time, limited 45-year-old school in North East has been able to provide. There has been a consistent waiting list of about 150 students for tech classes, and many students graduate from county high schools without ever getting into the tech classes they want. And the old tech school, which looks like a cinder-block prison, does not have the facilities and labs for many of the high-tech training businesses want in their future employees.
The elected school board had established creation of a new tech school as its top priority, and board chair Lauren Camphausen, joined at the press conference by board member Dawn Branch, could barely contain her enthusiasm. “This critical endeavor” was the culmination of the school board’s efforts, she said, and the board looked forward to working with the County Council to make it a reality.
Formal legislation to proceed with the Basell project is being fast-tracked, with initial introduction of enabling legislation and bond authorization procedures set for Tuesday, 8/6/13. A public hearing before the Council is set for 9/3/13, with projected final action on 9/17/13.
The financial details of the proposed deal show just how much costs were added to the project by the foot-dragging and obstructionism of the Three Amigos—Commissioner/Councilor Diana Broomell (R-4) and Michael Dunn (R-3), and former Commissioner James Mullin (R-1) who was defeated for re-election— and will cost taxpayers.
The Basell site was originally valued at more than $20 million when it was put on the market for sale in 2006, but in the economic recession its asking price was slashed to $6.5 million—an attractive prospect that piqued the interest of CCPS. But when the Three Amigos refused to consider a purchase, a Baltimore County real estate investment firm, Blue & Obrecht Realty, snapped it up for just $5 million in April. Even before that firm purchased the property, it was trying to get CCPS to lease it—but state education laws require a school to be owned, not leased, by the local school system.
And, sources said, the new Baltimore owners immediately re-listed it for sale, apparently hoping to get a quick, “flipper” profit without actually developing the site or finding a paying tenant. In the past few months, the Baltimore owners floated rumors of potential plans that they might demolish the 158,000-square foot, two story facility—including 18,750 square feet of modernized scientific laboratories– to be replaced by a pre-fab or similar low-end warehouse. Such rumors triggered horror among Cecil County business and political leaders.
Financial details of the new purchase proposal by CCPS show that the basic purchase price would be $8.25 million, plus a $60,000 a month “lease” arrangement for one year ($720,000) for a total cost of $8.97 million.
Since the Baltimore real estate interests have only owned the property for a few months, its significant profits would be taxed at short-term capital gains rates rather than more favorable long-term gain rates. And by structuring part of the deal as a year-long lease, there could be tax advantages for the seller, sources said.
Apart from the basic costs of acquisition of the Basell property, renovation costs to convert it to school usage are estimated at $9.9 million. That would yield a total expenditure of more than $18.8 million to develop the new tech school, according to Tom Kappra, the chief financial officer for CCPS. State school construction funds would contribute $4 million of that cost—and CCPS previously offered to contribute $1.5 million from its reserve funds—for a new net county government cost of about $13.3 million.
The Basell site costs are projected at vastly less than the potential costs of building a new tech school from scratch at a possible cost of over $40 million. State school construction officials have visited the Basell site and have been enthusiastic about its prospects as a cost-effective alternative for a future tech school.
The county’s costs would be borne by issuing bonds, and the county executive proposes including bonds for the Basell project in a new upcoming bond issue for a variety of projects.
Moore said Friday that she realized the delays caused by the old Commissioners’ board had boosted the costs of the project significantly. “It was a missed opportunity, without a shadow of a doubt,” she said. But even at a somewhat higher price now, the Basell property represents “our future,” she said, adding that she preferred to look ahead rather than backwards at the events of the recent past.
A new majority of the County Council is on record as strongly supporting the Basell property acquisition for a tech school. Council President Robert Hodge (R-5), Alan McCarthy (R-1) and Joyce Bowlsbey (R-2) are all outspoken supporters of the project. Bowlsbey attended Friday’s press conference and said, “ I can’t tell you how excited I am” about the planned acquisition of the Basell site.
The new three-vote majority will likely expedite the Basell school site project—in stark contrast to the old “Three Amigos” majority of the County Commissioners that opposed the project and instead thought that some modifications of the old tech school site would be adequate. County Councilor Diana Broomell (R-4) was the leader of the anti-Basell charge while a commissioner and will no doubt be a vocal foe of the new plan. But, for a change, she is now in the minority on the Council.
It is important for county residents to understand the history of the tech school proposals, and the foot-dragging and obstruction put into play by the Three Amigos, that have resulted in increased costs for taxpayers—and a stunning profit for the Baltimore real estate operators in just a few months, thanks to the actions of the Amigos.
The crucial County Commissioners decision on the previous Basell property proposal was made in a secret, closed-door session in May, 2012. [See Cecil Times Special Report here: http://ceciltimes.com/2012/05/cecil-county-commish-reject-in-secret-vote-plan-to-jumpstart-new-tech-school/ ] The secret nature of the decision—which was permitted under state open meetings law because it dealt with real estate negotiations—meant that citizens, parents and business leaders were deprived of the opportunity to speak out in public meetings to argue the merits of the Basell vo-tech proposal. CCPS officials were “devastated” at the time, but vowed to fight on. (Not to toot our own horn, but the above linked article gives a detailed look at the issue and the factors in play for the pros of the site and the problems CCPS faced in dealing with the old Three Amigos’ objections.)
Then, last October, shortly before the November general election, school officials sought a small step to potentially revive the project but the Three Amigos refused even to place on the agenda for discussion a request from CCPS to allow the schools to spend $60,000 of its own ‘fund balance’ reserves to hire an engineer to evaluate formally the Basell facility’s suitability for a tech school.
That move effectively killed any chance at that time for the project even to be considered, and killed its prospects for inclusion on the state education budget timetable for financial support. [SEE Cecil Times reports here: http://ceciltimes.com/2012/10/2600/ and here: http://ceciltimes.com/2012/10/pre-election-agenda-for-cecil-county-commish-push-animal-buddies-stall-votech/ ]
So the political paralysis in Cecil County government under the Three Amigos’ reign provided a golden opportunity for Baltimore speculators to make a huge profit for a few months of patience. Thanks so much, Amigos…But even at the higher price now, most county business and education leaders see the Basell site as a relative bargain.