Gary schools bank on building deal
By Carole Carlson firstname.lastname@example.org | 648-3154 October 27, 2012 6:40PM
The Gary State Bank building is seen at the corner of 5th Avenue and Broadway in downtown Gary, Ind. Wednesday October 24, 2012. | Stephanie Dowell~Sun-Times Media
Updated: November 29, 2012 6:25AM
GARY — It’s not academic to some, but Gary Community School Corp. officials defend plans to move their central office into the 85-year-old, 10-story Gary State Bank Building at 504 Broadway.
In a written statement, officials said the move offers educational opportunities for students and increases the district’s revenue options “so that the former bank building will become a beacon of light for the city again.”
The School Board voted 5-2 on Oct. 23 to accept the donation of the building and 350-car parking garage from EFN Gary Property LLC, based in Westmont, Ill. The company is controlled by Edward Napleton, who owns several auto dealerships.
“I think it’s a tremendous opportunity for the school district to be able to expand education opportunities by partnering with colleges and universities such as Indiana University, Purdue and Calumet College,” board president Darren Washington said.
“This location could also house a charter school.”
Superintendent Cheryl Pruitt said the bank building needs minimal work and Napleton would take care of existing problems. She said a cost analysis was being done comparing expenses between moving and staying at the current 620 E. 10th Place location where there are problems with the roof and boiler system.
The district hopes to renovate the building with tax increment financing, tax credits and private equity.
The tax impact
The school district’s gain could also be a loss.
When the school district assumes ownership of the bank building, it likely won’t have to pay taxes on it because it’s exempt. It’s unclear whether the district would be taxed for its rental customers.
Tax money on the property that went to the school district, city and county this year amounted to $35,618 this year.
Attorney Robert Lewis told the School Board on Tuesday the building was valued at more than $2 million. Tax records in the Lake County Treasurer’s Office, however, list its gross assessed valuation at $1,048,300.
The purchase doesn’t add up for all School Board members.
Marion Williams, who opposed the deal, said he doesn’t think the district did its due diligence. He said he never saw evidence of a certified appraisal, a list of operating costs, fire inspection reports and occupancy information.
“It’s not part of our overall district master plan. The No. 1 concern for me is improving teaching and learning and improving our standing with the state. That’s where we need to place our resources. A central office is not a No. 1 priority. If we’re going to upgrade facilities, we should upgrade where children are.”
Williams, chairman of the board’s building and grounds committee, said eight school boilers are “in dire need” of repair and eight roofs need to be replaced.
Earlier this year, the district slashed jobs and trimmed costs in response to a $14 million deficit because state revenue declined in the wake of shrinking enrollment.
Williams ticked off a list of some closed schools — Vohr, Riley, Ivanhoe, McCullough, Carver — and said any one of them would be a better choice for a central office.
Williams, who owns several properties in the city, said he was offered the 504 Broadway property along with the former Bank One building at 8585 Broadway in Merrillville, in 1999. Bank One was acquired by J.P. Morgan Chase in 2004.
The 504 Broadway building was included in the portfolio acquired by EFN Gary Property LLC in 1999, Williams said. The occupancy rate in the Gary bank building was about 80 percent in 1999 but has declined to about 10 percent today, Williams said.
Meanwhile, Gary Chamber of Commerce Executive Director Chuck Hughes called the School Board’s decision a positive move, from an economic development standpoint.
“The fact that anyone would occupy a structure of that magnitude, it’s a good thing. I see it enhancing the downtown and creating more activity.”
Gary State Bank opened during the city’s soaring post-World War I era. Money from mill workers, as well as the mill giant itself coursed through its busy lobby at 5th Avenue and Broadway.
White marble covers the lobby floors and walls and it shares an entrance with a pharmacy.