Despite a second offer and concerns about the timeline, the Hays USD 489 school board voted Monday night to sell the Washington school property to Overland Property Group, Lenexa, which plans to develop it into low-income housing.
The sale of the 93-year-old former elementary school at 305 Main was approved after about 40 minutes of discussion at Monday’s regular meeting of the board by a vote of 4-1, with one abstention.
Washington was closed as an elementary school in 2015 and was opened the following year as Early Childhood Connections, housing Head Start programs.
The district late last year purchased the former Oak Park Medical Complex for $2 million and will renovate it to house Early Childhood Connections beginning in 2019-20.
Voting in favor of the sale for $500,000 with $5,000 earnest money was Mandy Fox, Mike Walker, Paul Adams, Luke Oborny and Sophia Young; Lance Bickle voted against. Greg Schwartz abstained from the vote, citing a conflict, but he did not elaborate on what it was.
A second offer was received from Hays property management company Turn-Key Property Solutions, 412 Autumn Lane. In a letter to Superintendent John Thissen dated Jan. 9, owner Michael Graham said his intent was to convert the former elementary school into an apartment complex for Fort Hays State University students.
His offer was for $180,000 with $20,000 earnest money and a closing date of Aug. 1. Neither Graham nor anyone representing him was present at Monday’s meeting.
Matt Gillam, vice president of development for OPG, was present, and stressed the need for a decision now, as he has a deadline in the first week of February to apply for federal historic tax credits. The board’s next meeting is Jan. 28.
“I don’t like putting guns to people’s heads, but if I don’t have approval tonight, I can’t move forward,” he said.
He said he will need a resolution of support from the City of Hays and will need to conduct studies for the historic tax credits. He’s already had conversations with City Manager Toby Dougherty and staff, he said.
“We’ve got our consultants teed up and ready to go, but I obviously can’t do any of that until I have assurances that we have a formal contract,” he said.
Several board members expressed concern about the timeline of the project. OPG will close on the property by Jan. 31, 2020, according to the contract.
“Three hundred sixty-five days seems like a long time for us to tie up a property when we are taking on a construction project,” board member Paul Adams said, referring to the Oak Park project. “It would be nice to offset some of what we have to do there.”
Gillem said working with investors who buy the tax credits and the government “red tape” takes much time.
“It’s important to be realistic with these things and the process itself,” he said. “You wouldn’t believe all the red tape. That’s about the simplest thing I can tell you. It’s such a complicated financing mechanism that 365 days, I’m going to be hustling to get it done,” he said.
Gillem said he should know by June if the historic tax credits are approved, and promised transparency to the board throughout the process.
He said he believes the building can be renovated, and that is OPG’s preference.
“If you remove that building, just like our buildings across the street, we’d have to build up out of the flood plain,” he said, referring to OPG’s Stonepost Apartments built in that area already. “I believe that school has significant value to me.”
He also noted the value school buildings have in a community.
“It has some value to them in their hearts. If someone is going to tear the school down, be ready, because we’ve experienced that in a lot of communities. Tearing down a school is not as simple as it sounds.”
Asked by Adams if market studies support the need for low-income housing and by Thissen why approach the school for the project, Gillem said in their experience and information from the state, the need is great in Hays, and the downtown area is preferred.
A 2017 market study for a proposed apartment complex at the site of the Fort Hays Trailer Park, 618 E. Fifth, showed a need for more than 100 homes for low-income people, Gillem said.
“Since then, we’ve seen the demand grow,” he said.
Stonepost now has a waiting list of abut 80 for its 63 units, he said.
In addition to the trailer park, OPG attempted in 2014 to develop a site on East 22nd near Hays Medical Center, but the state didn’t approve either of those for the low-income tax credits.
“The state’s always come back to us and they just don’t like the location, but they love this location,” he said of the downtown area. “So they’ve always encouraged us … try to find more sites in that area. We’ve been unsuccessful until now.
“I’m pushing this pretty heavily, quickly because we believe this is a great opportunity for us, for Hays. The demand is clearly here,” he said.
Gillem said the school building should allow for 16 to 18 apartments. Plans call for construction to begin at the end of 2019 or early 2020, with about 10 to 11 months for the renovation. He said he’d like to incorporate the historic Washington name into the complex, rather than put it under the Stonepost brand.
In addition, the land could allow for future construction of an additional 40 to 50 units on the site.