Hilliard school board members and district officials say they wanted to reach a deal with the nonprofit Help All Kids Play to build soccer fields on a 124-acre tract the district owned, but they could find no way to make the deal legal after considering it from many angles.
"Everyone would have preferred that it be soccer fields," Treasurer Brian Wilson said. "That's why we worked so ... hard for almost a year, but we just couldn't get past the legalities."
Because of the circumstances, the district last month sold the land at 4617 Leppert Road to Rockford Homes for $40,000 per acre.
The deal nets it about $4,960,000, less a 3-percent brokerage fee, and is contingent on Rockford Homes obtaining the desired rezoning and development plan within 240 days of the April 22 sale.
The district purchased the 124 acres between Leppert and Cosgray roads from the Grener family in 2003 for $50,000 per acre, which totals about $6.2 million.
The purchase price in 2003 was about $1.24 million more than the sale price.
The plan was to use the land for a third high school, but following the rejection of two bond issues, the district purchased 114 acres on Walker Road for $25,000 per acre and built Bradley High School, which opened in 2009.
Help All Kids Play's offer initiated last summer was for $50,000 per acre, but it would pay out the $6.2 million over the course of 30 years, according to district officials.
District officials said that the almost $5 million the Hilliard City Schools would receive immediately from Rockford Homes is worth more than the $6.2 million paid out over 30 years when considering the "time value of money."
Wilson estimated that an offer of $50,000 per acre, spread over 30 years, is worth about $33,394 per acre, or about $4.14 million.
Wilson said while it was difficult to estimate the additional amount of money the district would need to offset the time-value factor from the 2003 purchase, the district would have needed to sell the land for more than $50,000 an acre.
In addition to the estimated diminishing value of the money over time, the questionable legality of a payment plan -- which district officials previously likened to becoming a "lender" -- hindered the proposal.
Section 6.13 of Ohio Revised Code, governing public boards of education and titled "Terms of sale," reads in part: "A sale of school property in return for a note or mortgage, land contract or other commitment to make installment payments is unauthorized and contrary to law."
However, the section further states, alluding to the Ohio Constitution, "the question of what constitutes a loaning of credit by the state has generated a great deal of litigation and is not entirely free from doubt."
The section of code includes an exception to the rule of a district accepting long-term payments: when the buyer is another public subdivision or entity.
Based on its interpretation of the Ohio Revised Code, the district's legal counsel, Scott, Scriven and Wahoff, recommended against accepting the offer from Help All Kids Play, Wilson said.
"The board felt strongly about the offer and explored every possible option to make a deal work but there were just insurmountable hurdles," said Wilson, not the least of which was the inability of Help All Kids Play to secure financing.
Wilson said the nonprofit organization, founded in 2010, had annual receipts since then of less than $50,000.
"I have PTOs and boosters larger than that," Wilson said.
Wilson said even if Help All Kids Play's offer were legal to accept, the offer from Rockford Homes is "a significantly better deal."
Pat Shivley, founder and managing director of Help All Kids Play, disputed that, asserting that Help All Kids Play had demonstrated the ability to pay off the land in 15 years, and that the district's figures do not take into the account the expense that the district will incur to educate children who could live in the homes Rockford potentially could build.
The land deal also has sparked conflicting accounts about how much city officials knew about the deal, if district officials reached out to them for help and if city officials knew about the Rockford Homes offer.
On Feb. 26, Wilson and Hilliard Economic Development Director David Meeks met for lunch at an Old Hilliard restaurant for a regularly scheduled meeting to discuss general business.
Wilson said he told Meeks "it looked like the (Help All Kids Play) deal wasn't going to happen."
Wilson said last week he could not recall all the details of the meeting with Meeks. However, he said, he conveyed that the district "would be glad to work with the city" to resurrect the deal, but as presented, the board could not accept it.
Wilson said he felt it was made adequately clear that any deal with Shivley would require help.
Board member Heather Keck, in response to criticism from city officials on the Rockford Homes deal, said last week "it would be nice if the city made an offer to buy it" if the city wanted soccer fields at the site.
Meeks said he and Wilson discussed multiple topics Feb. 26 and the conversation eventually turned to the Help All Kids Play offer.
Meeks said Wilson told him the board could not accept a 30-year payment structure with Help All Kids Play, but that "the school (district) never reached out to us."
When advised that Rockford Homes had made an offer, Meeks said, he recalled chucking about the "political ramifications" of a school board selling to a developer, but "never contemplated (the district) would sell to a developer."
Rather, Meeks said, he thought Wilson simply was being open about the district's strategic tactics.
"I thought involving a homebuilder was a way to get (Help All Kids Play) to improve their offer," Meeks said. "I thought it was just part of the dance."
The school board approved the sale to Rockford Homes on April 22, and some city officials said they were surprised about the decision.
Hilliard Mayor Don Schonhardt said April 23 he was not aware the school board had accepted the offer until ThisWeek inquired about the issue.
For his part, Shivley said it "was a shame that the city and the schools can't work together."
He also said he was frustrated the board as a whole did not meet with him personally.
Shivley said Assistant Superintendent Tim Hamilton was the liaison between him and board members.
Shivley said while he never directly asked the city to guarantee a loan or finance the purchase, he felt it was understood by all parties that the city was willing to do so based on a letter of support the city provided in July when the proposal was first presented to the board.
That included include an offer to fund the necessary infrastructure for the project.
Shivley said he spoke with city officials after the board informed him in February that the proposal was not acceptable and to submit an alternative proposal.
"I believe we had that alternative, but by then the school board had already decided to accept the cash offer (from Rockford)," Shivley said.
It was not clear, Shivley said, what loan amount the city would guarantee, or how much cash was immediately available.
"It was a serious proposal," school board President Andy Teater said. "We wanted to make this happen and explored every avenue to make it legal."
Teater said he believes the district gave ample opportunity to the city to intervene.
"If the city wanted soccer fields, if they thought they could help, they had the opportunity ... and still do," Teater said. "The Rockford deal isn't final until it is rezoned."
According to the tentative deal, Rockford could opt out of the purchase if the desired zoning is not achieved, but the district cannot reverse its offer to sell, Wilson said.
Aside from the interest of Rockford Homes and Help All Kids Play, the district had only one offer for the parcel in the past seven years, also from a homebuilder, Teater said.
City Council President Brett Sciotto said May 6 he remained skeptical that the board performed "due diligence" concerning the exploration of Shivley's offer, first presented to the board at an executive session July 9.
Sciotto said there is a "real willingness" to set aside a sizable amount of land within the 124-acre parcel that Rockford Homes is optioning for use as soccer fields and other athletics uses.
Robert Yoakam, president of Rockford Homes, said April 30 the city is willing to allow part of the parcel to be used as athletics fields that Help All Kids Play would operate.
"If the school board would have ever suggested it to us first, we would have said yes," Sciotto said, referring to a collaborative approach with Rockford Homes and Let All Kids Play.
"We put these kinds of deals together all the time," said Sciotto, adding the district could have sold to more than one buyer.