Tuesday, October 29, 2013

Philadelphia Mayor, City Council, and School District at Odds Over Selling Closed School Buildings

Real estate investment firm Municipal Acquisitions’ (MA) offer to buy 30 of Philadelphia’s closed schools for $100 million has sparked a feud between the city council, the school district, and the mayor. The School District of Philadelphia has to make up a $304 million deficit, and City Council President Darrell L. Clarke thinks that MA offers a creative way to stabilize the district’s finances. The school district and Mayor Michael Nutter, however, are cautious about the “too good to be true” offer, particularly as MA has not appraised the properties. After the school district passed on MA’s offer, Clarke called for a hearing on the district's financial stewardship. Clarke and Mayor Nutter are already disputing where to find $50 million that the city promised to loan the district in September. Mayor Nutter reportedly wants to borrow the money; Clarke wants to give the school district money for closed buildings that were already at odds over where to find the $50 million the city promised the district in September. Nutter wants to borrow the money; Clarke wants to give the district cash for closed buildings that could be sold to pay back the city. Drexel and Temple universities have expressed interest in seven of the closed schools. MA specializes in offering to buy public buildings from local governments in financial difficulties. If MA’s bid gets serious consideration, get ready for some fireworks, because MA’s attempted acquisition of North Carolina’s Roanoke Rapids’ theatre was a controversial leaseback deal that Roanoke Rapids ultimately rejected.


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