District reaps benefit of developers' belief in schools' prestige, land buys come in a fraction of expected cost

By JONATHAN CRIBBS
jcribbs@beaufortgazette.com
843-986-5517

The Beaufort County School District was able to buy more than 200 acres in Bluffton for about $15 million this week -- far less that it had planned -- because the landowners believe the presence of a school increases the value of their development, district officials and developers said.

The district paid about $65,000 per acre for about 186 acres for a future middle school and high school -- part of225 acres that includes about 39 acres of wetlands, said Phyllis White, the district's chief financial officer. The wetlands were about $3,000 per acre. An option agreement was signed May 8, White said.

The final price falls well below what district planned a year ago to pay in growing Bluffton -- about $275,000 per acre, she said. That was the number used to build April's $162.7 million bond referendum, which including more than $40 million for new schools. The initial estimates were provided by the Town of Bluffton, White said.

District officials said the low price resulted from a combination of circumstances, first being a lagging real estate market. Board Vice Chairman Bob Arundell also said the district included a 7 percent buffer with each proposed project to avoid costly and politically damaging overruns, which occurred in 2006 with Whale Branch High School. The school is under construction in Seabrook.

The district had to return to voters for a $43.7 million bond referendum in 2006 to get an additional $2.4 million for the school's $35 million budget.

"We did not want to make the same mistake," Arundell said.

Developers also were interested in including the school in its new community, New Riverside, said Tom Gardo, a spokesman for Crescent Resources, a Charlotte, N.C.-based residential and commercial development company.

"We thought it was a fair price," Gardo said. "The developers thought it was a benefit for the overall community."

New Riverside encompasses 3,641 acres and will include up to 4,731 single- and multi-family housing units -- split into several neighborhoods -- and 190 acres of commercial development, he said.

The school district negotiated the land deals through a consultant, Al Berry, president of The Educational Group in Columbia.

"We really kept an arm's-length distance," White said. "If a seller called me, a landowner, I immediately turned it over to Mr. Barry."

The district initially planned to buy just 120 acres for the middle school and high school. In essence, it did. Of the 255 acres, about 127 of it can be built upon due to mandated buffers and other restrictions attached to the site, White said. On the bright side, however, the land has already been permitted to build on by the U.S. Army Corps of Engineers, and the district won't have to wait for that approval, which can take more than a year.

The district planned to spend about $33 million, including the 7 percent inflation buffer, on the land for the two schools, both of which remain outside the district's long-range facilities plan and may not be needed if enrollments and housing construction slows, district officials said. If the district doesn't need it, it could sell it years from now for a profit.

"There are very few parcels of land that you can find that will accommodate a high school by itself," White said. "We didn't have a lot of choices."

Taxpayers gave the district permission to borrow up to about $40 million for four parcels on which to build a Bluffton elementary school, a Lady's Island Elementary School, a Bluffton middle school and a Bluffton high school. The district knocked out three of those Tuesday, and spent only $15 million. White said money not used simply won't be borrowed.

"We will not use the land money savings on anything else," she said.

Almost $6 million was included in the April referendum for the new elementary school, and its actual cost was less than $3.1 million. Again, the district planned to buy 20 acres, and it got 30, not including 26 acres that were donated.

Landowners for the elementary school could not be reached for comment.

"The bottom line, I believe, is that the estimates were based on historical price trends in the area coupled with the assumption that the purchase might be made a few years down the road," Arundell said. "The district capitalized on the change in circumstances and was able to buy up this land for far below what anyone thought would be possible."

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