Is the SDA Getting Back into the Real Estate Business?

John Mooney | April 7, 2011 | Education
The Schools Development Authority ponders what to do with 160 properties purchased for projects that are no longer on the priority list

Some of the properties were condemned, others bought for market prices five or six years ago. That was before the bottom dropped out of both the real estate market and the Schools Development Authority (SDA) itself.

The most famous was the more than 60 lots — a good-sized neighborhood — in and around Dewey Street in Newark’s South Ward that the SDA bought for a new high school, displacing dozens of families and leaving a ghost town.

The houses were since demolished. What remains is a vast empty field of green grass. The new high school is not even up for consideration at the moment.

Now, with what are plenty of questions as to exactly what schools will be built, the reorganized SDA is starting to look at whether any of these properties could be sold to the highest bidder, helping recover some of the costs.

At NJ Spotlight’s request, the SDA this week released a list of more than 160 properties in Newark, Irvington, Camden, Union City and Jersey City that it bought for 14 school projects — and close to $50 million — that are no longer on the priority list, let alone anywhere close to proceeding.

They include 32 properties bought for a new middle school in Irvington for close to $9 million, and a single commercial site in Asbury Park bought for $5 million for an early childhood center.

The properties on Newark’s Dewey Street and other nearby streets costs $12.4 million, according to the SDA.

Not for Sale

Still, SDA officials stressed this is all preliminary and no sales are yet planned. They said there are detailed rules for how to dispose of these properties in public sales or auctions. For the time being, signs in English and Spanish on the Dewey Street site indicate that it is “Not for Sale.”

“Currently, the SDA is examining the properties it owns to determine if there are any properties that can be deemed “surplus,” wrote spokeswoman Edythe Maier in an email, “and if so, what to do with them within the stipulations of our regulations.”

The topic arose last week when SDA chief executive officer Marc Larkins went before a joint legislative committee to further explain how the SDA had chosen the projects it is proceeding with.

Long plagued by questions of waste and mismanagement – ones that came to a head in 2006 – the SDA has since moved in fits and starts in reviving the projects ordered by the state Supreme Court as part of the Abbott v. Burke litigation.

Not a Priority

The SDA announced earlier this year that is moving ahead with 10 projects out of 110 on its priority list, those that fit closely with its new emphasis on standardizing design and construction.

The choice has been controversial, since more than 50 projects that had been earmarked to proceed in 2008 are now stalled, as the SDA revisits how it will proceed, with Larkins saying that cost-savings will be a premium.

But as part of that testimony, Larkins said one unresolved issue that the SDA also has to address is the properties that are likely no longer in play at all, purchases and condemnations that he said had been an “embarrassment” to the SDA.

He said just plowing some of them in this winter’s snow storms has cost “in the thousands of dollars, tens of thousands of dollars.”

Providing more detail, the SDA reported that the maintenance costs overall for the 161 unused properties in the six cities have been more than $290,000 since January 2010. That includes plowing, lawn care, fences and padlocks, it said.

Word of the SDA looking at reentering the real estate business, now potentially as a seller, raised more cries of frustration from legislative leaders who have been dogging the SDA for information on how it will proceed.

“What is the game plan?” said state Assemblyman Patrick Diegnan Jr. (D-Middlesex), chairman of the Assembly’s education committee. “”It just seems as chaotic as any agency in the state.”

“Let’s find out what is the end game,” he said. “This continues to be more questions than answers.