Seaford School District Provides Q & A on Referendum Proposal

The following was submitted by the Seaford School District

What follows are some of the commonly asked questions and answers concerning the proposal for the sale of the Seaford Avenue School and property, which will be decided by Seaford’s voters in a referendum vote on Dec. 12.

History of the Seaford Avenue School

The Seaford Avenue School, which was built in late 1935, last educated Seaford students in 1981. In September 1981 all of the district’s elementary students were reassigned to the Harbor and Manor Elementary Schools. Once it was no longer used for the education of Seaford’s children, the school was leased to Five Towns College for 10 years beginning in September 1982 and then to Nassau BOCES from 1992 through 2010. The building has been vacant for the last two years.

1992 through 2010.  The building has been vacant for the last two years.

Q. Why are we selling the Seaford Avenue School building and property?

A. Without any current or foreseeable income in the future from the property the district can no longer afford to absorb the cost of maintenance and expect residents to make up for the loss of yearly income. We expect to save about $100,000 in yearly maintenance costs and expect another $500,000 in yearly property tax revenue from the residents who purchase the units.

Q. Why not wait until the real estate market improves to sell the property?

A. For every year the district waits it will continue to pay maintenance costs on the building and land, and lose out on property tax revenues that will come from the proposed residences. For example, if we wait two years and receive $1 million more for the property, we will have lost $1 million in tax revenue and also would have spent $200,000 on maintenance costs.

Q. Why doesn’t the district consider having the Town of Hempstead or Nassau County take over the property?

A. We engaged the town in this discussion over two years ago and they had no interest. The financial situation in the county makes that possibility unrealistic.

Q. If no playing fields remain at the Seaford Avenue School where will those youth organizations go to play?

A. Nassau County and the Town of Hempstead provide excellent all-weather fields at Washington Avenue Park, Cedar Creek Park and Seaman’s Neck Park. The Harbor School athletic fields are also available and currently underutilized.

Q. Why doesn’t the district consider demolishing the building and maintaining the property itself?

A. Due to environmental issues the cost of the demolition of the building is in excess of $2 million. Maintaining a vacant property brings no revenue into the district. In addition, the school district is not in the business of maintaining parks or park-like property. The cost of maintaining non-revenue producing property wastes financial resources that could be best used to educate our children.

Q. Why can’t we put more than one option up for a vote?

A. Under the law, only one referendum for the disposition (sale) of a property can be placed on the ballot at one time.  The district does not have the ability to place “choices” for residents to vote on.  This process is very different than a general election, for example when electing the president of the United States. Additionally, the development of condominiums on this property was the only type of offer received by the district.

Q. Who is purchasing the building and land?

A. After engaging Greiner-Maltz, a local commercial real estate firm to market the building and land, BK at Seaford (the Engel Burman group) presented a proposal which the Board accepted.  There was one other proposal that Greiner-Maltz received, which the Board reviewed and countered, but the Board never heard back from that bidder.

Q. Is the contract of sale available for public review?

A. Yes, the contract and all amendments to the contract are available on the district website.

Q. What happens if the referendum passes but the town does not permit the zoning, or the zoning is reduced to fewer units?

A. If the zoning is not approved the buyer can elect to cancel the contract. If zoning is approved for less than 113 units the price is adjusted downward; but in no event can the purchase price be lower than $4,950,000. If zoning is approved for less than 100 units the buyer can also elect to cancel the contract.

Q. What is the selling price for the building and the land?

A. The gross sale price is $5,193,500.  The gross amount will be reduced by Greiner-Maltz's commissions, attorney's fees and other adjustments based on the final number of units to be built. In no case will the gross selling price be less than the $4,950,000 minimum specified in the contract of sale.

Q. What is the cost of commissions, legal fees and other expenses?

A. The commission is 4.5% of the purchase price.  Attorney’s fees are approximately $15,000; the cost of the vote and miscellaneous postings and communications are approximately $12,000.

Q. How soon will the school district realize any flow of funds from the sale of the building?

A. Realistically, it could be two years for the process to be finalized.  Voting on the referendum of sale is the first step in the process followed by review of the plan by the proper government agencies, ending with zoning approval and then the closing of the sale.

Q. What does BK at Seaford, LLC envision for the property?

A. The plan is to build between 100 and 113 condominium units. The units will be designated as housing for residents 55 years of age or older and not allow children under the age of 18.  Initially, current Seaford residents and their parents will be offered purchase opportunities prior to non-Seaford residents. First floor units will feature 1000 sq. ft. of living space and a 1000 sq. ft. basement which can be finished. Second floor units will have a private elevator, cathedral ceilings, 1000 sq. ft. of living space and an approximately 300 sq. ft. loft. All units have two bedrooms and two full bathrooms. The community will have a central clubhouse, including a fitness center and outdoor pool. The selling prices of the units will be in the $350,000-$400,000 range.

Q. When did the proposal become age 55 and older with no children?

A. Originally, BK at Seaford did not envision an age and child restriction. After hearing feedback at the Oct. 4 informational meeting, they ascertained that making it age 55 or older and not allowing children would satisfy residents’ concerns about the make-up of the development. This also led to the final amendment of the contract and the postponement of the initially scheduled October vote.

Q. What assurances does the District have that 55 years or older condominiums with no children under 18 will be built?

A. The last amendment to the contract includes that a restrictive covenant will be placed in the deed that requires the property to be developed as a 55 years and older community with no children under the age of 18. In the event the builder does not honor the contractual commitment and the covenant, the District can go into court and legally prevent the builder from constructing some other type of property.  The covenant can also be enforced by the Town of Hempstead and the town would not approve another type of development.

Q. If BK at Seaford, LLC sells the property what stops a new builder from doing something different?

A. The contract could be assigned, but the new property owners would be bound by the same terms of the contract as BK at Seaford, LLC.  The covenants run with the land and cannot just be ignored by a new developer.

Q. Is the district responsible for any costs in taking the building down?

A. No, the contract makes BK at Seaford, LLC responsible for all costs involved in the demolition of the existing building.

Q. What happens if the proposition passes?

A. BK at Seaford, LLC will have the responsibility for gaining all of the necessary zoning approvals and variances for the project from the Town of Hempstead and any other possible governmental approvals needed. The builder will not seek any tax relief from the town for the residences and will not offer any subsidized units.

Q. Can the property be developed as a rental community?

A. No, The contract for sale specifically requires the property to be purchased as owner-occupied condominiums.

Q. Will the condominiums generate parking problems?

A. All units will have adequate parking spots which are located inside the development. This should reduce any parking issues in the surrounding area.

Q. What about additional traffic?

A. While there may be a small increase in overall traffic, it is expected that this will be spread out over the course of a day. Currently there are bottlenecks in the area during the times that the fields are used when people park on both sides of Waverly Avenue. With parking inside of the development this will alleviate the issue around parking.  BK at Seaford performed a traffic study which is available on the website.

Q. Is an increase in student enrollment expected from these units?

A. The condominiums will be for residents 55 years of age and older. Children under the age of 18 are not permitted to reside there. This should eliminate the addition of children into the schools.

Q. What will the district do with the proceeds from the sale of the property?

A. Under New York State law the net revenue from the sale after commissions, attorney fees and other adjustments will be placed in a reserve fund.

Q. What happens to the money after it is placed in the reserve fund?

A. The Board of Education is required to use the funds over a period of up to 10 years.

Q. If the property is sold, why aren't the net proceeds given directly back to the taxpayers?

A. Under New York State law, the funds must be placed in a reserve fund which can be used to apply to the tax levy.  In essence, the money is being returned to the taxpayers, but not in one lump sum.  Returning it in one lump sum is not sound financial management and is illegal.

Q. How will the reserve money be used?

A. The Board of Education will have the responsibility each year to decide what amount of the reserve will be used as the budget is prepared. It is planned that this additional revenue will enable the district to retain, restore or expand programs for students and make needed facility repairs/ improvements while complying with the New York State property tax cap.

Q. Will the community have to vote on the use of the proceeds that are placed in reserve?

A. If any of the funds are placed in a capital reserve fund, the voters would be asked to vote on the use of that money for the specific capital improvement project. This would be a separate ballot proposition.

Q. Will the district receive any additional tax revenue from the sale of the building?

A. Yes, under the current tax cap rules each school district is provided with a growth factor from New York State to include in the calculation of their tax cap figure. This growth factor includes new developments and other changes in the district and is added to the prior year's base tax cap figure.

Q. When the district receives additional tax revenue from the proposed condominiums, how will the additional revenue be used?

A. The additional tax revenue generated by the new residences becomes part of the existing tax base of the district when developing the budget each year. Since the tax cap formula allows new development to be included in the tax cap calculation, the district will realize an increase in tax revenue.  This will allow the district to retain, restore and advance our educational program.

Q. Who is responsible for paying taxes on unsold units?

A. BK at Seaford will be responsible for those taxes until the units are sold.

Q. What if the proposal is not approved?

A. If the Board made a decision to market the property again they would need to enter into a contract with an agent and begin the marketing process from the beginning. Keep in mind that the district would continue to pay for annual maintenance on the building and property of approximately $100,000 and would not receive any revenue from the proceeds from the sale or any tax revenue.

Q. Where can I get more information about the sale of the property?

A. Please refer to the district website at: www.seaford.k12.ny.us where all current information will be posted. For more information about BK at Seaford, LLC, please visit: http://www.engelburman.com.

Q. Will there be an informational meeting prior to the vote?

A. While the district will not be holding another formal informational meeting, there is a board meeting scheduled for Thursday, De. 6, where any questions not previously asked could be raised. The Board of Education with district officials and the purchaser, BK at Seaford, held an informational meeting on Oct. 4 in the high school auditorium.  Over 300 residents attended this session, where questions were asked and answered.  As a result of feedback at that meeting, the purchaser requested that the vote on Oct. 16 be postponed so that the contract could be amended to incorporate certain provisions to make the contract more specific and provide clarity on certain provisions.  A copy of our presentation and BK at Seaford's presentation, along with the contract and all amendments, is on the district's website for your review.