Hays USD 489 will put the former Washington Elementary School property up for sale once again.
The school board voted unanimously at its regular Monday night meeting to list the property at 305 Main under sealed bid without acting on an addendum to the contract the property is currently under with Overland Property Group, Lenexa.
Under the current contract, which the board approved in January, OPG has an option to buy the property for $500,000 until Jan. 31.
However, Matt Gillam, Vice President of development for OPG, told the board last month the company was not awarded the federal tax credits it had hoped to use to finance its plans to renovate the 93-year-old school into low-cost housing.
The Kansas Housing Resources Corporation strongly urged the project pushed to 2020, a move Gillam said he had not seen in his 16 years of business.
At that time, he encouraged the board to consider a new contract with OPG that would allow the developer to apply for the tax credits next year.
But Monday night, board members thought it best to try and market the property again.
Board member Greg Schwartz, who abstained from the vote in January citing a conflict of interest, quickly made the motion to list the property.
“I wasn’t in favor of it last time, but I get why it passed because it was the higher number and the timing wasn’t that far off,” he said about OPG’s first offer.
Only one other bid was received in January, for $200,000.
“But now we’re another year away, and maybe they get it, maybe they don’t,” he said of the tax credits.
“If they don’t, then we’ve sat on it, and sometimes a bird in the hand is better than two in the bush. I think we at least open it up and see what interest there is, if any,” he said.
Most of the discussion centered on whether or not the board would have to approve the addendum to the contract in order to list the property.
Board attorney Bill Jeter said the property could be listed without the addendum.
“I think we can open it up for sealed bids with the understanding that we’re not going to close until potentially after Jan. 31, 2020, and it would be subject to the contract we’ve already entered into,” he said.
The addendum specifies the district could market the property until Sept. 30, but could not accept an offer lower than OPG’s $500,000 offer. OPG would also have 30 days to match a greater offer or cancel the contract.
“At this point, the original contract is still enforceable,” Jeter said. “They have a right to close up until Jan. 31 of 2020. So anytime between now and then, if they can come up with the $500,00, it’s done.”
However, Gillam told the board at its June meeting that without the tax credits, he cannot move forward. Applications for the tax credits open in February and are awarded in May.
Other board members voiced their support of Schwartz’s motion.
“I like what they proposed and what they want to do. This is just too long of a lead time to buy up a property,” Paul Adams said.
“They seemed so confident the first time, and then we’ve had this stumbling block. I feel like we should open it up, too,” Mandy Fox said.
“At the end of the day, I don’t think we have anything to lose,” Lance Bickle said.
The board also voted to have Jeter examine the request for proposals before the property is listed.
Washington was closed as a school in 2015. The following year, Early Childhood Connections moved in, housing early childhood programs such as Head Start.
Late last year, the district purchased the former Oak Park Medical Complex, 2501 E. 13th, for $2 million and is renovating it with a $1.4 million Head Start grant to house ECC beginning in the fall.
OPG, which has offices in Salina, has plans to invest $5 million to renovate Washington into one- and three-bedroom apartments. The housing would add to OPG’s 63 units of Stonepost Apartments on and near south Main it has built over the last 12 years.
The developer has financed those projects through the federal Low Income Tax Housing Credit Program, which stipulates residents have income at or below 60 percent of the area’s median income.