Austin school district to seek bids on 10 properties worth $95 million

aisdFrom today’s Austin American-Statesman:

The Austin school district will seek bids for 10 of its properties, including its 128,000-square-foot headquarters on West Sixth Street, the former Millett Opera House currently leased by the Austin Club, and the Baker Center administration building in Hyde Park.

The district could sell, lease, swap or repurpose the properties to generate one-time revenue or create other long-term plans for their use. They have a total value of more than $95 million.

The most valuable of the offerings is the Carruth Administration Center, which sits on 2.75 acres at 1111 W. Sixth Street. Originally designed to be a mixed-use project with office, residential and retail components, the headquarters is valued at $33.6 million, according to district estimates.

The district bought the property more than 25 years ago and has looked into selling it at least once, but it never got an offer that was attractive enough to district leaders.

“I can certainly see this as an opportune time; the market would respond very favorably,” said Charles Heimsath, president of Capitol Market Research, an Austin real estate consulting firm, pointing to the major redevelopment taking place at the former Seaholm power plant and the former Green Water Treatment Plant nearby.

Regarding the Austin Club, which is a half-block off of Congress Avenue, Heimsath also said “there’s a wide range of possibilities for a property like that.”

District records show the Austin Club, which has had a lease with the district since 1979, paid the district about $48,000 in rent in 2014. The district has valued the property at an estimated $6.3 million.

The list of properties the district is offering includes the former Allan Elementary, and the school board is also considering options for other plots of land, ranging from an acre in East Austin to 32 acres in Northeast Austin, as well as its Central Warehouse and Service Center. The properties are labeled as being noninstructional, but some trustees pointed out that early education is being taught at Allan, albeit through partnerships with local nonprofits and not by the district. More than 12 acres of green space the district owns in Travis Country in Southwest Austin has been used as an outdoor environmental sciences classroom by the Green Tech Academy at Small Middle School.

The Austin school board will vote Monday night on whether to issue requests for proposals that allow developers and other entities to pitch ideas for using the lands and facilities. District leaders are considering a three- to four-month time frame to gather proposals, but the process could take longer.

“We’re hopeful that we can get some really thoughtful proposals back,” said Nicole Conley, the district’s chief financial officer. “There’s a lot of interest now in sort of partnering in the market.”

Community members and some city and district leaders have discussed ideas such as creating affordable housing for teachers and other civil servants on surplus property, doing leasebacks or swapping properties.

“These are not done deals,” Trustee Ann Teich said. “We’re exploring opportunities with this land, and it would be a better use of our time and our energy to do this rather than to just leave these properties unexamined.”

The Austin school district previously sought bids in 2011 for its West Sixth Street headquarters and the Baker Center in Hyde Park to ease a budget crunch, but it ultimately wasn’t satisfied with the offers. This time, trustees say looking at the district’s real estate resources is a necessary step for long-range planning.

As was the case in 2011, the district has retained Austin commercial real estate firm Southwest Strategies Group in seeking proposals for the properties.   

Previous board discussions on properties have dealt with how to more wisely use district assets, including leasing buildings for market value. The district last month hired consultant Brailsford and Dunlavey to look at facilities and planning in a broader way, as trustees tackle prolonged issues of underenrolled schools in some areas, overcrowded schools in others, and aging facilities. District leaders expect a master plan for all the facilities by May 2017, and they will consider any proposals made for the 10 facilities within that plan.

Trustee Amber Elenz said she is excited to see what ideas come forward and considers the requests for proposals a necessary step before the district can consider going back to voters with a bond request to address its needs. However, she cautioned that the district might need to place appropriate restrictions or expectations on any real estate deal.

“We’re approaching this as an opportunity to see what greater yields we may have in the use of these different properties,” Trustee Yasmin Wagner said. “It’s an exploration exercise at this point, not an austerity measure.”