TRAVERSE CITY -- Schools and budget cuts seem to go hand in hand these days. Districts like Traverse City Area Public Schools are making cuts and stretching every dollar. So when one of our viewers heard about the hard times, she wondered why TCAPS doesn't sell some of their vacant buildings to boost the bottom line. In fact right now the district does have a collection of empty schools and vacant land. Is TCAPS sitting on some property profit? The answer is the subject of this Fact Finder.

As TCAPS chief financial officer and executive director of operations, Paul Soma's job is to make sure that the district spends every dollar wisely. So it didn't come as surprise to him when I showed up with our viewer's question. The thought had already crossed his mind. As Soma explains it, "We have 3 elementary schools that are not being used for educational purposes right now, Sabin, Bertha Vos, and Norris."

And if you drive by them like some of our viewers have, you too might wonder why TCAPS doesn't sell these vacant schools, pocket the profit, and give their bottom line a boost. It's a good question, but historically, districts selling schools around the country has not been a real cash cow. Soma recalls "I have even heard of schools selling them for a dollar, just to get rid of them."

But just because a school doesn't sell well in another state doesn't mean that the property here in Traverse City isn't worth a pretty penny, so I wanted to dig a little deeper. Let's start with Sabin Elementary. Soma says selling it doesn't make sense since TCAPS is investing 3 million dollars to convert the gym into a new data center. That is a long term commitment to that building. I told you about that project in an earlier Fact Finder. So Sabin is out, but that still leaves at least two vacant schools. And according to Soma, TCAPS has done the homework on their worth, "We have had an analysis done, a property evaluation report for what the market is for these properties and what we expect dollar wise." That being said TCAPS has a pretty good idea on two things: first, what the former Norris and Bertha Vos Elementary buildings are worth and second how easy they would be to sell.

Let's cut to the chase. Soma says "the overall conclusions of that report are the properties would be hard to sell, and if they sold they would be sold for a high dollar amount."

In fact according to a third party prepared evaluation, Norris and its 5 acres of land, and Bertha Vos with 7 acres are each worth between $400,000 and $500,000. It doesn't seem a like a lot of money if you wanted to buy one, but keep in mind these buildings need a lot of costly improvements to get the 35,000 square feet back up to code. With that in mind, there aren't that many interested buyers out there. In fact, even though the buildings are huge, Soma explains "I would say to that point the properties of Norris and Bertha Vos are probably more valuable if we were to take the buildings off them."

The bottom line is selling the two vacant buildings might provide a small time cash inflow, but in the long term according to Soma "it wouldn't solve any problems. It would be irresponsible to use money from a capital sale to offset operational costs. You know those are one time dollars, once you sell it its gone to try and offset on going expenditures from that would be really inappropriate use of those funds and not responsible management."

Now it does cost the district about $30,000 a year to do very basic maintenance (like mowing the grass) at the two schools in question. TCAPS doesn't pay taxes on any of their properties so that is not an expense. TCAPS also owns 5 other pieces of vacant land around the county. Keeping those for the time being according to Soma makes sense to allow for future growth and maybe new schools in the future.

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