Lexington 1 officials defend high-priced school land deals. Are they paying too much?

Lexington 1 has agreed to purchase 54 acres of land near Pelion High and Pelion Middle schools.
Lexington 1 has agreed to purchase 54 acres of land near Pelion High and Pelion Middle schools.

When officials of Lexington 1 wanted 50 acres of land for a new Pelion Middle School, they didn’t have to look far.

Across the street from the present Pelion High School and near the current middle school was a suitable tract owned by someone familiar to most in the district. It belonged to former school board member and former Pelion High School principal Jean Nichols Haggard and her brother, Hugh.

The district paid Haggard and Nichols $985,500 for the 54.75 acres — seven times the value set by the county for taxation purposes. The public howled about the price and the appearance of an insider deal.

“I understand the optics of that,” Superintendent Greg Little told The State in an exclusive interview last week. “But location is incredibly important for a school decision and you get one shot. Do we avoid the right piece of property because of the owner?”

It wasn’t the first time the district has paid a high price for land for a new school, a study by The State shows.

In 2010, the district paid more than $5 million for 146 acres of riverfront property for River Bluff High School. That’s seven times the value set by the county.

In 2011, the district paid $1,250,348 for 25 acres of property for Meadow Glen Elementary School — five times the county appraisal.

Last year, the district paid $975,640 for about 20 acres for a new Gilbert Elementary School. While that is only twice the county valuation, it includes paying $238,795 for five acres that was valued at $49,730. The parcel was needed for a land swap to fill out the tract.

Those prices have many in the community grumbling that the Lexington 1 school board and administration are either wasting taxpayer money or doing insider deals.

“They don’t have people down there that have run a business and made a payroll,” said Ted McGee, a long-time Lexington County commercial real estate broker and community leader. “They are not looking out for the taxpayers.”

Jada Garris, a Lexington 1 parent and self-appointed watchdog, was more blunt.

“They do backroom deals,” she said., referencing the Pelion land purchase. “They take care of their friends.”

Growing needs

With about 25,500 students in K-12 last year, Lexington 1 is the second-largest school district in the Midlands and seventh largest in South Carolina. It stretches from Lake Murray to West Columbia, and its 2018-2019 budget is $280.6 million.

The district operates 30 schools in and around the sprawling town of Lexington outside of Columbia and in rural Pelion and Gilbert. The 30 schools include five high schools — Lexington, River Bluff, White Knoll, Pelion and Gilbert.

Census totals for the last 40 years show a consistent increase in population in Lexington County, according to a facilities report presented by the administration to the school board last week.

For the past 15 years, Lexington 1 has grown an average of 500 students per year and has added 13 schools during that time to meet the growth, the report shows. Next year, it is expected to grow by 600 students.

Projections show that the population is now growing toward Gilbert and Pelion.

Even though the district has built schools, it is still using about 150 portable classrooms to meet enrollment needs, according to the facilities report.

A $336 million bond referendum passed in 2008 resulted in three new elementary schools, one middle school and one new high school, River Bluff. Renovations were also made to 15 other district locations, the report shows.

To meet present needs and prepare for future growth, the district is planning to build two new elementary schools in White Knoll and the town of Lexington. It wants to relocate and increase enrollment at Gilbert Elementary, Pelion Middle School and Lexington Middle School.

To do that, the school board is prepared to ask that a $393 million bond referendum to be placed on the November election ballot. It will likely pass the resolution at its Aug. 7 board meeting, just eight days before the Aug. 15 deadline for doing so.

But the optics of the Pelion land deal, among others, could jeopardize passage of that referendum.

Even the Greater Lexington Chamber of Commerce, whose members would benefit from a bond referendum because it would spread the cost of school system growth to homeowners as well as businesses, has yet to come on board.

“We’re not prepared to take a position yet,” said Otis Rawl, the chamber’s president and CEO.

‘A different animal’

District officials say paying high prices for school land is caused by myriad factors that range from location to suitability.

“It’s not like buying a house,” said the district’s chief operating officer, Jeff Salters, who participated in The State’s interview with Little. “It’s a different animal.”

Most importantly, Salters said, the tract has to be in the right spot and it has to be the right size.

An elementary school requires 20-25 acres of land with approximately 1,200 feet of road frontage. A middle school needs 30 to 40 acres of land with approximately 1,400 feet of road frontage. A high school requires 100 or more acres of land and about 2,000 feet of road frontage.

The district also considers other factors such as attendance zones, traffic patterns, soil conditions, county zoning ordinances, and infrastructure like power, water and sewer in addition to the cost per acre.

And in the end, the site must be approved by both the S.C. Department of Education and the S.C. Department of Transportation.

“So the true cost of the land is the cost of developing that land, not just the acreage,” Little said.

Once the right site is located, a purchase has to be negotiated, Salters said. The district is at a disadvantage from the start, he said, because the land owners most likely have not contemplated selling and know they are dealing with a government entity with deep pockets.

“I can’t remember the last time we bought a piece of land that was actually for sale,” Salters said.

The district also is in competition with commercial and residential developers who are looking to build in the same growth corridors.

“There aren’t that many big tracts around” that meet school standards, Salters said.

He added that comparing sales prices to the county tax appraisal is not a true measure because most of the large tracts are valued by the county as farm land.

“And as soon as we come along (the owners consider it) commercial property,” he said.

A niche business

But adding to suspicions of some Lexington-area residents is the 20-year relationship the district has had with a single broker — Al Berry of The Educational Group.

Berry is a former assistant superintendent for planning and operations who retired in the 1990s and went into business “prospecting” land for schools across the state.

It’s a niche business that few brokers can fill, Salters said.

“From 1996 forward I have been involved with almost every purchase related to a school site in District One,” he said in a telephone interview Friday. “I’ve purchased over 100 school sites from Beaufort to Pickens. I don’t know anybody else that does this. I’m trying to use the talents God gave me to help school systems for years to come.”

Berry is paid a 5 percent commission by the sellers. And, although not under contract with the school district, he receives a fee of about $4,000 from the district for each transaction to shepherd the property through due diligence until it is approved by the state transportation and education departments.

“That’s the same fee I’ve charged for 20 years,” he said.

But the arrangement between Berry and Lexington 1 has fueled the suspicions, especially because his wife, Evelyn, is a former Lexington 1 superintendent.

“He has all the inside scoop,” said McGee, a Lexington County community leader and commercial real estate broker.

Berry named the same factors as Salters for high prices for school land.

When comparing sites, school officials must consider the cost of making them ready for construction, especially the construction of a school, he said.

“It’s not the acreage price” alone that must be considered, he said.

Insider deal?

Berry brokered the controversial Pelion deal for the district with Haggard, whom he knew from his days as an administrator.

In a telephone interview with The State on Friday, Haggard said there were no negotiations for the property. Berry offered her and her brother nearly $1 million for the site upfront.

“He offered first and we accepted,” she said.

But Salters and Berry, interviewed separately, said there were extensive negotiations, with Haggard and Nichols wanting $36,000 an acre first — the same price as a recent district purchase in a more urban area — before agreeing to $18,000 an acre.

“There was back and (forth),” Berry said. “That’s the Gospel truth.”

Salters said he didn’t want to contradict Haggard, a longtime employee, former board member and friend of the district, “but there were negotiations.”

Little said the administration is now considering brokering its own deals internally because of the controversy.

“”We need to clarify our land purchase practices for the public,” he said.

Controversial or not, Little said the property was the right purchase at a fair price. He said Pelion Middle School is the most in need of replacing in the district and now a new school can be built when funding becomes available.

“People in Pelion say they are the red-headed stepchildren of the district,” he said. “The board wanted this to be the promise to Pelion that change is coming. They will go from having the worst campus in the district to having the best.”