GARY | Leaders of the broken Gary Community School Corp. believed selling closed school buildings would be a way to raise money to pay its bills and better educate students.
However, that process has been stalled by an IRS tax lien on the closed school buildings.
There are 21 closed school buildings, including the old school service center. The district moved out of the service center into the former Lincoln Achievement Center, which also needs numerous repairs.
School officials began selling buildings in 2010 when they were being squeezed by charter schools, declining enrollment, reduced tax collections and decreases in state funding.
The former Tolleston Middle School was sold to The Boys & Girls Club of Northwest Indiana for $100. Banneker Elementary School was sold to the National Civil Rights Museum for $50,000. Beckman Middle School was sold to Lew Management for $100,000. The district was negotiating with former KIPP Lead charter school for a sales price of $300,000 on Norton Elementary School.
That deal fell through when the law was changed requiring school districts to lease or sell a closed school building for $1 per year to a charter school. Then KIPP closed.
Many of the closed school buildings have become a monstrosity in the neighborhoods with broken windows, graffiti scribbled on the inside and outside of school buildings and overgrown grass and weeds adding to an already seedy appearance. In some areas, neighbors come out and try to keep the grass cut, but not everywhere.
Gary attorney Kenya Jones, with Robert L. Lewis and Associates, which handles the school district's real estate, said a deal fell through to sell the former Chase Elementary School.
"Chase was one where we had accepted an offer, and when the tax lien came up we had to call a halt to it," she said. "We have not closed that deal. It's still pending. I can't discuss the details. I can't identify the potential buyer."
The Gary Community School Corp. owes more than $7.1 million in taxes and interest to the IRS. That includes delinquent taxes of $5.1 million and penalties and interest of $2 million. It has made at least one installment payment of $10,000 to the IRS.
The school district also owes $4.15 million to NIPSCO, $730,000 to AT&T and $440,000 to the Gary Sanitary District. It has been barely treading water, trying to keep up with the payroll. All told, the district is $23.7 million in debt.
Gary Schools Superintendent Cheryl Pruitt said the district has experienced many issues, including a decline in tax collections. She said the collection rate was about 94 percent in 2008. By 2014, it had dropped to 42 percent.
Pruitt has taken steps to cope, including the closings and reducing the number of teachers and administrators to shore up the budget. However, the district's deficit continues to climb along with the overall debts.
In 2011, Jones said the school district did a formal bid notice with plans to sell the shuttered Aetna, Kuny, Melton, Spaulding, Chase and Carver elementary schools, along with Edison Middle School. The only school that sold was Kuny. She said it was sold to Life Ministries International for $50,000 in 2012. However, that building sits vacant and is considered an eyesore in the community.
"Due to the IRS issues, we can't do anything with the buildings right now. We have to provide clear title, and we can't do that," Jones said.
"Over the years, we've also had interest in the buildings but one of the things that people have to consider is the utilities, maintenance and overall upkeep of a building that size. We would love to sell the buildings. I get calls all the time, but until the IRS lien is cleared, we can't do anything."
Slow decline
Rep. Vernon Smith, D-Gary, said at one time he thought about purchasing one of the closed school buildings to use as a recreation center for the African American Achievers Youth Corps Inc., an educational organization he established.
In addition to being in the Indiana House of Representatives, Smith is coordinator of the Education Leadership Program at Indiana University Northwest in Gary, and an educational consultant for the Gary schools. He was the principal at Nobel Elementary School for seven years, as well as serving as interim principal and assistant principal at several other elementary schools.
Smith said it would be a big responsibility to take on one of those buildings.
"You need major dollars for building projects like that. It's a good concept but the dollars have to match the concept," he said.
Smith said when he first began working in the Gary schools, there were 40 buildings, 20 of them elementary schools. They were well maintained.
"It's frightening that we're at a point where we have to have the state play a role. It's unfortunate the Legislature and governors have moved money from the urban schools to suburbia. School systems across the country need help," he said.
Smith said he has nothing against charter schools, but the division of more schools means less money for all.
"It's just not good mathematics. Every charter school is its own little school corporation and it doesn't make sense to split the money up among so many different corporations," Smith said.
Concerned neighbors
Julian Bey, Mildred Thomas and George Clark live in the Ambridge neighborhood.
Bey said residents used to work together to keep the grounds around the school maintained, even planting flowers.
"We had been doing everything we could to keep the drug dealers from coming in here and setting up shop," he said, walking around the building.
Thomas said she's frustrated.
"When the school was open, the grass was perfect. Now, we have to beg them to cut it. There is graffiti on the building. People come along and throw trash out and bottles. We used to do a lot to keep it up but as you get older, you just aren't able to do as much. It's an eyesore," she said.
Bey said drug dealers know to keep away.
"We will let it be known we don't tolerate that in this neighborhood. We're very serious about that, and we will call the police about almost anything we see that is out of the ordinary."
Bey said he'd love to see it turned into a community center, perhaps with an arboretum in the back.
Clark said it doesn't take "a rocket scientist" to maintain the grounds. He said he hopes nothing ever happens at Ambridge like the dead body of a teenager being found at the former Emerson school building last week.
"You can see all the trash thrown out here. People drive down the street and throw trash out their cars," he said.
Jorge Chavez, 72, said when he went to Edison Middle School in the mid-1950s, it was the most beautiful school and neighborhood.
"The people were so friendly. They still are. We are one big, happy family," said Chavez, who moved to the U.S. from Mexico as a child.
"When the mills started closing down, it started getting rough around here," he said. "People got laid off. They lost their jobs and started moving away from here. As the young people grew up, they left the neighborhood. There's nothing left but us old people."
Donald Williams, who lives in the Vohr Elementary School neighborhood, said some of his grandchildren went to Vohr and there was never any air conditioning. He said there's been some vandalism to the building, and it takes months for school maintenance workers to come cut the grass.
Willie Stewart, who also coaches wrestling at West Side Leadership Academy, said he regularly walks around the Horace Mann track and remembers when they renovated the gym.
"I thought it was going to stay open but they closed it a few years later. It's sad to see these buildings going to waste."
State steps in
The budget legislation approved by the Indiana General Assembly calls for the Distressed Unit Appeals Board to assist the school district, much as it assisted the city of Gary a few years ago. State Sens. Earline Rogers, D-Gary, and Luke Kenley, R-Noblesville, were instrumental in providing that lifeline to the district.
The Gary School Board is considering three financial specialists -- Robert Bobb, with the Robert Bobb Group; Gilbert Hopkins, with McConnell, Jones, Lanier and Murphy LLP; and Jack Martin, with Martin, Arrington, Desai and Meyers. DUAB gave the district 21 days from July 14 to select a financial adviser.
Gary School Board Vice President Rosie Washington said the board will take the time to make sure the specialist is a good fit with the district.
"We will be reviewing and talking to each of the three," she said. "I was real pleased when I heard snippets about them from Micah Vincent (DUAB chairman). All three have actually been involved with entities that have similar demographics and concerns that Gary has.
"We will not do this in a haphazard manner or shooting from the hip," Washington said.
Pruitt said she hopes DUAB can also assist them with the IRS lien and getting back on track to sell school buildings.
She also has been looking across the country at other school districts. She said the Kansas Public Schools have 30 closed schools and have developed a repurposing initiative where the community has come together to talk about what can be done with the buildings.
"That's the direction we are going in, with the city and state collaborating with us," Pruitt said.
"I've talked to the mayor and (U.S. Rep. Pete) Visclosky about how we can access demolition dollars. I understand the neighborhood's concerns about the closed school buildings and the need to do something with them. I believe that we'll be able to move forward with these new partnerships."