How do you sell a school building?
Seaside School District has three of them on the market: Seaside High School, Broadway Middle School and Gearhart Elementary School. Each are scheduled for closing next summer, when students will attend classes at the new middle and high school in the Southeast Hills. Gearhart Elementary School students will join students at the Heights. The buildings are being marketed by Raymond Duchek of Norris & Stevens in Portland in conjunction with Larry Popkin of Popkin Real Estate in Seaside.
A fourth building, Cannon Beach Elementary School, is being marketed separately.
Q: How did you develop the marketing pieces? What points you were trying to hit?
Duchek: We put that in together in collaboration with Larry, based on our combined experience of marketing properties. We’re trying to put together a piece that expands the market beyond a local buyer pool, trying to get a more regional distribution of buyers interested in Seaside and all the benefits that it has.
Q: What type of businesses or organizations investors are you looking at to market the schools?
Duchek: We haven’t zeroed in. We’re looking to market it to the broadest net possible.
We want to talk to developers, we want to talk to people who might be interested in using the existing structures — lots of different approaches. We’re trying to get as many options on the table for the school district.
Popkin: Even community organizations.
Q: Is that beyond Seaside?
Popkin: Clatsop and beyond.
Q: What is the zoning for the middle school?
Duchek: The middle school has two zones medium-zone residential and commercial zoning on the property, and the high school is all medium-density residential.
Q: That provides a lot of opportunities for housing, it would seem.
Duchek: Housing would be a good fit for the high school.
Q: You’re thinking of it as a residential type of development?
Popkin: If a developer comes in and brings something else, yes, that’s the most likely scenario.
Q: Do you have feelers, have you had calls?
Popkin: Yes, we have we’ve had communication with different potential developers.
Q: If someone wanted to put a hotel at the high school building site, could they? Or would they need a zoning change?
Popkin: They’d need to get a conditional use permit to do so.
Duchek: They couldn’t outright, the way it’s zoned right now, so they’d have to work with the city if that would even be allowed.
Q: Some Seaside residents have asked the city to pursue purchase of the property west of the high school, overlooking the estuary on North Holladay. Is that part of the larger high school bid package?
Duchek: That would be part of the sale.
Q: How is Gearhart Elementary School zoned?
Popkin: It’s currently zoned for a school, and it’s our understanding it will revert to a residential zone once it ceases to be a school.
Q: Have you been in conversation with the city of Gearhart?
Q: Can you discuss the type of concerns you might have had about the building?
Duchek: Not really. I don’t think that would be appropriate.
Q: Could Gearhart Elementary be used for commercial purposes?
Popkin: Not without a zone change.
Q: Are you selling the buildings as is, as teardowns, or will you let the buyer decide?
Duchek: The market will determine that.
Q: So, if someone wants to keep a building as it is or refurbish it, they’re welcome to?
Q: At the Broadway Middle School property, what are the zoning rules?
Duchek: The front portion has commercial zoning, C-3, and the back half has R-2.
Q: Theoretically someone could do mixed-use type of development?
Q: Is it also being sold as-is?
Some buyers will want them completely demolished and make way for new stuff. Other people will see a lot of value in what’s in place between the kitchens, gymnasiums and auditoriums. It’s just going to depend on who figures out what type of development they want to do there and if they can use parts of the existing structure.
Q: The new school campus won’t be ready until the fall of 2020. Does that mean buyers will have to wait until the new school opens before they move forward with redevelopment plans?
Popkin: The answer to that is that the school is not going to be prepared to move early.
Any sale will require the school district to maintain continued use of those structures until the end of next summer. That’s the current plan.
Duchek: They could sell the buildings tomorrow. They (the buyer) just won’t occupy them until the new schools are open.
Popkin: They’ll be made aware of that.
Q: Where will you be promoting or advertising the sale of Seaside’s schools?
Duchek: We will be using our traditional marketing reaches, which include a lot of internet-based providers, like LoopNet. We will get local MLS (Multiple Listing Service) and local outlets through Larry, and we each have, from being in the business, investors we’ve worked with in the past. We’ll try to cast a broad net.
Q: If you were doing a pitch to get me interested, what would you stress about these properties?
Duchek: I think as it relates to Broadway, you have a fantastic intersection, Broadway and 101. You’ve got a substantial piece of property that’s right in the main corridor of the community. You’ve got lots of traffic counts through there, it’s close for residents, it’s got a lot of amenities, but it will also appeal to the visitor population that comes through there.
And the other two, you have big tracts of land that are well located, that will provide a lot of different opportunities for developers to reutilize those spaces.
It’s hard to find that much acreage contiguous within the community.
Q: Have you had experience selling institutional properties like this?
Q: Typically, how does it come out?
Duchek: I’d say there’s not a typical result. It’s all market-driven.
Q: Whoever has the highest bid would be the one to get these?
Popkin: It’s not all about money. It’s also about the terms they’re offering. If there’s more than one offer on the table, it’s a much different conversation.
If there’s multiple offers on the table, they may want to think about who the buyer is or how the buyer is going to make use of it. The school district may very well consider this too, because they’re members of this community, and individuals want to see quality things happening at these locations.
Q: Who are you working with at the school district?
Popkin: There’s a committee there. That includes (superintendent) Sheila (Roley) and the business manager (Justine Hill).
Q: Will you be working with them on a day-to-day basis, or when you get a bid, or as needed?
Duchek: If a bid comes in, we’ll obviously be talking to them as soon as there’s an offer. But we’re communicating with them biweekly to make sure everybody’s on the same page.
Q: Where do you go from here?
Duchek: We’ll be involved with follow-up calls, direct marketing.
These are big properties. It will take time for people to put their plans together, ideas of what they want to do. We’ll be marketing through the summer — as long as it takes. We’ve got a whole school year to continue marketing.
Popkin: In these kinds of transactions, commercial transactions rather than residential, numbers and zoning and all the different things have to make sense to investors. There’s a lot less emotion involved than a residential transaction, where you see the house you like and you go, “Honey, we’re buying this.” It does take a bit more time to get things in order.
Q: How does emotion, if at all, play a role in marketing the schools? Is it hard for the district to part with these buildings?
Popkin: That’s probably a better question for them than us. These people have been involved with the district for many, many, many years, and I think we’ll see people from the community have a hard time at various times with these issues. I can’t imagine it not being the case.
Q: Is there anything else you would like to add about the process?
Popkin: To be clear, Popkin Real Estate and Norris & Stevens are two separate companies. We are collaborating together and were hired together to market and sell these properties.
With my office being here in Seaside, and their office in Portland, we have a local and regional presence to try and generate as much interest for this project.