THE SCHOOL DISTRICT OF PITTSBURGH ASSET MAXIMIZATION PLAN For Unused School Properties Presented by FOURTH RIVER DEVELOPMENT LLC March 1, 2013 Asset Maximization Plan FOURTH RIVER DEVELOPMENT LLC For The School District of Pittsburgh EXECUTIVE SUMMARY On July 20, 2012, Fourth River Development was directed to evaluate 19 closed school properties and present recommendations designed to maximize property values through enhancement procedures leading to site‐specific disposition strategies as well as detailed preliminary asset management strategies. The 19 closed schools are: Northview Heights McNaugher Mann Sheraden (Schaeffer) Stevens Schaeffer Beltzhoover Knoxville Bon Air Murray Burgwin Gladstone Madison Fort Pitt Rogers McCleary Morningside Belmar Homewood (Old) FRD was also directed to include Columbus School in this property enhancement process, which brings the number of former schools to 20. FRD reviewed School District policies and procedures that impact property values and disposition, as well as evaluating the marketability of the individual properties. The overall approach was that of an independent third‐party using an “Owner’s” point of view to look for possible opportunities and hindrances that may not be apparent to School District management and Board Members. GENERAL RECOMMENDATIONS 1. Work within Board Policy and the School Code to use all available means to sell/dispose of these 20 properties. 2. Utilize proceeds from recent sales of former District schools to offset the outstanding debt of the current 20 properties. 3. Establish a “reuse program” of operating equipment from closed schools. 4. Inventory each school for artwork, valuable artifacts, and memorabilia worth salvage and retention by the School District. 5. Inventory and remove furniture, supplies and non‐operating equipment from schools. 6. Retain all mineral rights upon sale of any School District real estate (not just these 20 properties). 7. Investigate utility usage and maintenance procedures to look for cost saving measures. 8. Bundle school properties. 9. Initiate a marketing effort for properties identified as having a high potential for sale. 10. Initiate a search for state and federal remediation funds to assist in the removal of hazardous materials from schools. 11. Work with other local agencies that own or control public property to consider (1) cooperative efforts to market adjacent or nearby properties and (2) transfer/trade ownership of properties to enhance particular assets. 12. Offer the 20 former school properties and all other currently operating school properties as candidates for mobile communication cell sites and billboard locations for revenue enhancement. 13. Order Appraisals and Install Appropriate Signage. 14. Revise District “Properties for Sale” webpage. SITE SPECIFIC RECOMMENDATIONS Annual Year No Facility Name Address Debt Operating FRD Recommendation Closed Cost 1 Northview Heights 310 Mt. Pleasant Road 2011 $1,956,680 $39,000 Negotiated Sale 2 McNaugher 2610 Maple Street 2011 $532,380 $38,500 Negotiated Sale 3 Mann 2819 Shadeland Avenue 2006 $33,580 $26,000 Negotiated Sale 4 Sheraden (Schaeffer) 3128 Allendale Street 2011 $229,880 $21,450 Negotiated Sale 5 Stevens 822 Crucible Street 2011 $564,860 $25,900 Negotiated Sale 6 Schaeffer 1235 Clairhaven Street 2011 $296,710 $15,450 Negotiated Sale 7 Beltzhoover 320 Cedarhurst Street 2004 $32,000 $23,400 Demolition 8 Knoxville 90 Georgia Street 2008 $616,770 $71,700 Retain as warehouse 9 Bon Air 252 Fordyce Street 2011 $18,000 $18,000 Negotiated Sale 10 Murray 800 Rectenwald Street 2011 $379,000 $33,900 Negotiated Sale 11 Burgwin 5401 Glenwood Avenue 2006 $244,600 $27,200 Negotiated Sale 12 Gladstone 327 Hazelwood Avenue 2001 $43,050 $80,200 Demolition 13 Madison 3401 Milwaukee Street 2006 $65,499 $29,800 Negotiated Sale 14 Fort Pitt 5101 Hillcrest Street 2011 $1,863,870 $46,000 Negotiated Sale 15 Rogers 5525 Columbo Street 2009 $93,125 $39,000 Limited Marketing/Donation/Demolition 16 McCleary 5251 Holmes Street 2011 $19,100 $18,550 Negotiated Sale 17 Morningside 1802 Jancey Street 2006 $9,180 $21,150 Negotiated Sale 18 Belmar 7109 Hermitage Street 2011 $1,344,350 $63,650 Demolition 19 Homewood (OLD) 7100 Hamilton Avenue 2011 $152,960 $43,000 Negotiated Sale 20 Columbus 1805 Buena Vista Street 2006 $657,893 NA Negotiated Sale $9,146,318 $681,850 School: Northview 310 Mt. Pleasant Road, Pittsburgh 15214 Year Built: 1962/1966 Year Closed: 2012 Historical Designation: No Land Area: 13.915 acres Gross Building Size: 67,900 square feet Annual Operating Cost: $39,000 Neighborhood: Northview Heights Current Debt: $1,950,000 Estimated HazMat Remediation: $160,000 Underground Storage Tanks? No Estimated Demolition Cost: $550,000 Current Appraisals: None Zoning: Low Density Residential Market: Located in North Hills, near I-279 and accessible from East Street (parallel to I-279). Good location for multiple redevelopment uses. Close to central business district but not impacted by traffic, parking, etc. The proximity to the Northview Heights housing project could negatively impact the redevelopment of this property should alternative access not be available. Property: Large developable land area. Large portions of the site are significantly sloped hillside but would still be developable. The buildings are in good condition. This location lends itself to multiple uses – office, residential, or community center for adjacent housing. Property value would be enhanced by gaining access directly off East Street via PennDOT Right of Way. Recommendation: Negotiated Sale Order 3 new appraisals, title search and initiate full marketing program Special Considerations: Pursue availability of PennDOT Right of Way at East Street for improved access to property. Contact with PennDOT already initiated (see following letter). Page 8 FOURTH RIVER DEVELOPMENT LLC 600 Waterfront Drive Pittsburgh, PA 15122 November 9, 2012 Mr. Jeff Powell Pennsylvania Department of Transportation Right of Way Office 45 Thoms Run Road Bridgeville, PA 15017 Re: Northview Heights Elementary School (Closed) 310 Mt. Pleasant Rd., Pittsburgh, PA 15214 Assessor’s Block & Lot # 77-C-245 Dear Mr. Powell, As discussed on the phone, Fourth River Development represents the School District of Pittsburgh in evaluating and disposing of certain closed public schools, including the subject property. PennDOT has Right of Way property that abuts the school property and we would like to know if a portion of this property is surplus to your needs and available for purchase. I have enclosed an Assessor’s Block and Lot map which shows the school property and PennDOT right of way property in question. I will call you in a few days to make sure that you received this request and to discuss your first impressions. Sincerely, Fourth River Development LLC Jerry Tullius Project Manager Cell 412.736.8111 Page 9 Closed Pittsburgh School Property currently under review to determine optimal disposition plan. Not available for sale at this time. Former Northview School 310 Mt. Pleasant Road Pittsburgh, PA 15214 Property Description: Land: 13.915 Acres • Tax Parcel #s 077-C-245 • Building: 67,873 Square Feet • Zoning R1D-L (Low Density Residential) Multi-Level Buildings • Large Parcel for Development 133 Parking Spaces • 2 Elevators Property Owner: The Board of Education of the School District of Pittsburgh Information available at www.frd.us.com/pghschools/northview.htm The information contained herein has been obtained from sources believed to be reliable but has not been verified. Fourth River Development LLC makes no guarantee, warranty or representation about its content or the accuracy thereof. Any projections, assumptions, or estimates are used for example only and do not represent the current or future performance of the property. Each recipient of this information and your advisors should conduct a careful, independent analysis of the property to determine if the property will meet your needs. Contact: 600 Waterfront Drive Pat Morosetti Pittsburgh, PA 15222 [email protected] 412.231.4444 Former Northview School 310 Mt. Pleasant Road, Pittsburgh, PA 15214 600 Waterfront Drive Pittsburgh, PA 15222 412.231.4444 School: McNaugher 2610 Maple Street, Pittsburgh 15214 Year Built: 1915 Year Closed: 2012 Historical Designation: No Land Area: 1.81 acres Gross Building Size: 58,900 square feet Annual Operating Cost: $38,500 Current Debt: $532,400 Neighborhood: Perry South Estimated HazMat Remediation: $196,000 Underground Storage Tanks? No Estimated Demolition Cost: $470,000 Current Appraisals: None Zoning: Local Neighborhood Commercial Market: The property is located just off Perrysville Avenue with good public transportation and high traffic volume. Neighborhood is moderately stable. Market rents and prices will limit development opportunities. Property: The building is large and in good condition. New construction and parking for future uses can be provided on the playground area and vacant school land. Potential uses are residential in nature, such as market rate apartments, and senior and special needs housing. Recommendation: Negotiated Sale Order 3 new appraisals, title search and initiate full marketing program Page 12 Historic Pittsburgh Landmark Property currently under review to determine optimal disposition plan. Not available for sale at this time. Former McNaugher School 2610 Maple Street Pittsburgh, PA 15214 Property Description: Land: 1.81 Acres • Tax Parcel #s 046-B-010 • Building: 58,909 Square Feet • Zoning R1D-H (High