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Published: Jul 18, 2006 12:00 AM
Modified: Jul 18, 2006 06:26 AM
 

Bill lets schools make build-and-rent deals

Developers could lease to districts

More North Carolina schools soon could have private landlords.

Under a bill passed Monday, developers could build schools and lease them to local governments for decades. School districts already could lease buildings, but not ones that were built just for them.

Supporters say the private sector can build schools faster -- and possibly cheaper -- than local governments can. They argue that long-term leases would give booming school systems such as Wake County's more flexibility.

"This will give us an opportunity for schools and school sites that normally we couldn't get," said Mike Burriss, Wake's assistant superintendent for facilities. "It puts another arrow in my quiver."

The legislation gives school districts another option for getting new classrooms without a bonds referendum.

For school boards, having that option could mean more certainty. Voters in Mecklenburg County turned down selling $427 million in bonds last year. Polls have shown Wake voters are skeptical about a record $1.06 billion construction plan on the ballot this fall.

Wake, Mecklenburg and other urban counties pushed for the legislation, along with groups representing developers. The bill has passed the Senate and the House and now awaits the governor's signature.

The legislation worries Sen. Hugh Webster, a Republican who represents Alamance and Caswell counties and cast the only vote against it in the Senate. He said a long-term contract is just "debt by another name" and should require voter approval.

"You're spending future generations' money," said Webster, a semi-retired accountant. "It's a dangerous thing to allow to happen. It's just too easy to spend into the future. You can't trust politicians to do that."

Burriss notes that school districts already can pay for new buildings without voter approval. County commissioners can issue other forms of debt that have slightly higher interest rates than voter-approved bonds, he said.

From UNC to K-12

Public-private partnerships to build schools have been tried in Virginia, Maryland and South Carolina in recent years. They also have been used extensively in Great Britain and parts of Canada.

The legislation got its start in North Carolina three years ago.

Robbie Ferris, a Fayetteville architect and chief executive officer of SFL+A Architects, drew up the first draft after his firm worked on long-term leases for the University of North Carolina system.

"We were looking for a way to apply what we've been doing at the university level to K-12 schools," he said.

The legislation is considered a program. Originally, it was to be limited to eight counties, but lawmakers amended it to make it statewide. At the same time, they added a provision ending the program in 2011.

Under the current system, private developers do not have much influence over schools.

Counties approve the funding, and school boards decide on the location and design of schools. Developers then submit bids through a competitive process to get contracts to build the schools.

Under the new system, developers could have more say.

A school board could ask developers for proposals for schools in a particular area. Developers would come up with the site, design and funding. The school board and county commissioners would then select among proposals.

Alternately, a school board could ask for proposals for a piece of land it already owns.

Susan Harrison, the Wake schools lobbyist, said that although the build-and-lease system could give developers more influence over locations and designs, the school district and county commissioners still would have the final say.

"We are not giving up control of where we're planning on putting our schools," she said.

The process that determines which schools students attend would not be affected. The legislation states that the long-term leases could not include any provisions about which students would attend the schools or which areas they would serve.

Would upkeep suffer?

Still, it's not clear yet exactly how the system would work.

Local government gadfly Stan Norwalk said he wonders how developers would manage the properties after the school district signs long-term agreements on new schools for as long as 40 years. "This says that the developer would take care of maintenance," said Norwalk, a retired executive who lives in Cary. "But if you've ever had a bad landlord, you know that's not always true."

Chris Sinclair, president of the developer-supported Triangle Community Coalition, said many of the details would be worked out after school districts begin taking advantage of the legislation. "We've always said let's give it a try and see what happens," he said.

Staff writer Ryan Teague Beckwith can be reached at 836-4944 or rbeckwit@newsobserver.com.

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