By Dan Hust
LAKE HUNTINGTON — Sullivan West’s school board is considering letting real estate brokers make them offers on selling the closed Narrowsburg and Delaware Valley campuses.
SW Superintendent Ken Hilton told the board at a facilities needs forum last week that a local commercial real estate broker had contacted him, offering to help the district unload the schools – albeit for a six percent commission.
Hilton does not have the authority to approve such a deal. In fact, the school would have to bid it out, with the winning broker being the one with the smallest commission.
The board is expected to take up the matter at its next regular meeting on December 1 (7 p.m. at the high school in Lake Huntington).
“I’ll probably recommend to the board that we go fishing for a potential broker,” Hilton affirmed this week.
He did recall, however, that the district tried the same route about a year and a half ago and garnered a single bidder, who wanted an eight percent commission. The board ultimately opted not to use a broker.
The campuses have since gone into and out of contract with developer Ilwon Kang, who bid $3 million to obtain both DV and Narrowsburg, then dropped out after he and the board could not agree on the terms of extending the due-diligence period.
If the schools are sold, a new state law will effectively reduce the benefit SW otherwise would have gotten.
Any sale proceeds must go to paying down existing debt, which tops $34 million. Much of that debt is paid for with state aid, which will be reduced when the campuses are sold, per the new law.
While the reduction won’t result in SW paying more than it currently does ($700,000 per year) on the existing debt, the decrease in aid from the schools’ sales means the district won’t reduce that debt payment as much as it had hoped.
Assuming the involved parcels are sold at their appraised value of just over $3.3 million, Hilton told forum attendees that SW will save approximately $73,000 a year on that annual $700,000 debt payment, rather than the $256,538-per-year savings calculated under the old rules.
Sold!
In the meantime, one SW parcel actually has been sold: the 58 vacant acres adjoining the DV school in Callicoon.
According to Hilton, successful bidder Richard Winter – who wants to turn the property into a beef cattle farm – closed on the deal by sending a check for the full amount ($205,000) to the district on Thursday.
“The check is already deposited,” Hilton confirmed.