By a 4-3 vote last week, the Durham Public Schools board approved putting $5.8 million into renovating and enlarging the vacant Whitted School.
For its money, DPS gets eight classrooms to serve 144 children in pre-kindergarten programs, which will share the building with 79 apartments for low-income elderly tenants.
School Board member Natalie Beyer voted against committing schools money to the project, saying that preschool education in a traditional school environment would be more effective and less expensive.
“We are the wrong partners for this facility,” Beyer said.
Her board colleague Mike Lee said he could not support “giving away” $5.8 million, and obligating the school system to an estimated $750,000 in annual operating cost for the Whitted pre-K, when the board is facing budget cuts and state funding decreases “for the foreseeable future.”
School Board Chairwomen Heidi Carter, though, pointed out that the $5.8 million is reserved for capital projects, including Whitted, and would not be available to fill an estimated $17 million gap in next year’s DPS budget.
Carter also pointed out that Whitted, on Umstead Street, is in the city’s Southside neighborhood-revitalization area and the schools have a part in community development.
“To help children succeed in school ... requires us to address the whole ecosystem in which our children live,” she said.
“That’s why it doesn’t feel like an alien move for us to make this investment. ... We are trying to improve the community.”
‘Sweet, sweet deal’
Durham County commissioners and the City Council had already approved $2.3 million and $600,000 respectively for Whitted.
The schools’ decision obligates a total of $8.74 million in direct public investment in the project, with the city expecting to add around $300,000 worth of road and utility infrastructure improvements.
Integral Development LLC of Atlanta, the project developer, expects to provide nearly $11.6 million through a combination of federal loans and tax-credits, according to a Public-Private Partnership (PPP) Agreement with the local governments and school system.
“This developer has a sweet, sweet deal,” Beyer said. “A sweet stream of public money.”
Integral will be paid to manage construction and, according to Deputy City Manager Keith Chadwell, will continue to manage the apartment section of the building.
Deputy County Manager Lee Worsley said last week that several more documents, such as a formal development agreement and lease contracts will still need completion and approvals by the county commissioners or school board before deal closing.
Worsley said the total project budget is $2.4 million, but he was waiting to hear from the developer on a breakdown of costs.
Durham County currently owns the Whitted building, but the project’s mix of funding sources with varying legal restrictions has led to a complicated ownership plan to get the renovation done.
The housing tax credits that Integral has secured cannot be used for work on a publicly owned project, according to a Worsley’s explanatory memo (nando.com/13e); at the same time, since public money is involved, the county and DPS need to keep a degree of control.
So, the plan is for Durham County to sell the building for $100 to Integral’s ad hoc subsidiary, Whitted School Development LLC.
The county will also create a nonprofit corporation, Durham Whitted NP, with a county-appointed board; which will in turn create a for-profit corporation, Durham Whitted Corp., and acquire an interest (using DPS’s $5.8 million) in Whitted School Development.
Durham Public Schools will lease the preschool space for $1 a year.
Worsley said he expects the deal to be closed in September.
The Whitted story
The Whitted School building opened in 1922 to house the upper grades of Durham's public school for black students. Next to Hillside Park, the school was named Hillside and served as the city's black high school until outgrowing its space in the 1940s.
In 1949, Hillside swapped buildings with the newer, larger James. A. Whitted Elementary School on Concord Street, but each school kept its own name. Whitted later became a junior high, and remained in use as a school until the late 1970s.
Nonprofits leased space there for a number of years, but the old school has been vacant for at least eight years, and fallen into considerable disrepair. In 2012, the county solicited developers’ proposals for renovating the building and favored Integral Development of Atlanta over the Durham company Traditional Neighborhood Development.