The fate of South High School is in the hands of an independent arbitrator, who vowed Monday to decide within 10 days whether the soon-to-be abandoned building is worth $1 million or five times that amount.
His decisions could determine whether South High is reborn as a community college or abandoned to become yet another sepulchre of urban blight.Neal P. Stowe, director of the state Division of Facilities Construction and Management, which is interested in buying the building, was hopeful arbitrator Jared Huish could end the stalemate between the state and the Salt Lake School District, even though his decision is non-binding.
"We're optimistic," Stowe said following the six-hour negotiating session.
"Both appraisers, ours and theirs, basically are in the same area."
Nonetheless, Huish, a Mesa, Ariz., real estate appraiser and a member of the American Arbitration Association, has his work cut out for him. During the course of the hearing, he was presented with vastly different assessments of the school, which will be closed in June because of declining enrollment.
On one side, Stowe and DFCM argue the school is an albatross that simply will not sell. However, if the price is right about a million dollars or so DFCM could buy the school and, with considerable renovation, convert it for use as part of Salt Lake Community College.
But the Salt Lake City School District, on the other hand, sees South as a community college in embryo. Attorney Clark Sessions, representing the district, argued that the South High facilities lend themselves to use as a community college and that a more reasonable value is somewhere between $6 million and $8 million.
Both points of view have merit. If there is no market for the sale of South High, then appraisers for both the state and the district agree the fair market value of the school is only about $1 million.
But that figure is arrived at by assuming the structure itself is not of any real value and that it will simply have to be torn down to make way for commercial and residential uses. In fact, DFCM does not contemplate tearing the building down, and the school district insists that it has some "value-in--use."
The value-in-use concept means basically that the use contemplated for the building is the same as that which the building was designed for. District officials claim South High can accommodate many of the needs of a community college, making its value-in-use a better indication of its actual value.
Zane Bergeson, a real estate appraiser hired by the district, said a value-in-use analysis of South High School places its worth at about $4.2 million.
He also said that under a third scenario, in which appraisers figure the cost to replace the facility, the school would be worth about $8.5 million.
But under questioning from Assistant Attorney General Don Coleman, who represented DFCM, Bergeson acknowledged that he believes the fair market value of the building is the best indication of it's true value.
Stowe readily agreed. He told Huish that South actually has no value-in-use because it cannot accommodate the community college without major structural changes. In fact, Stowe says he will have to spend about $9.5 million repairing roofing, providing handicap access and removing asbestos. All of those changes are required by the state building code.