CCSD’s purchase of office building draws criticism

By Emily Richmond

Wednesday, May 25, 2005 | 9:41 a.m.

The Clark County School Board's decision to spend $14.5 million for a fully outfitted office building has some critics questioning the timing and necessity of the purchase.

Charles Thompson, a retired Las Vegas attorney whose wife teaches at Gray Elementary School, said he's concerned that School District staff had apparently hammered out the fine print of the deal to buy the four-story building long before it was ever discussed or voted on by the School Board.

"This is about administrators running amok and a School Board completely out of touch," said Thompson, who has criticized the district on other issues.

His complaints echo those raised by members of the Urban Chamber of Commerce, as well as School Board member Shirley Barber.

The building, at 5100 W. Sahara Ave. between Edmond Street and Decatur Boulevard, has 66,645 square feet of office space and includes a separate three-story parking structure.

Clark County Schools Superintendent Carlos Garcia defended the purchase, saying it would allow the district to stop spending more than $931,000 annually to rent 68,044 square feet of office space at a variety of sites.

For more than two years School Board members have been discussing ways to eliminate the leases, which are paid from the district's general fund.

It would cost the district significantly more to buy land and attempt to build a similarly sized building, Garcia said.

"People are always telling us to run this district like a business and that's exactly what we've done," Garcia said. "This was a smart business decision that is going to save us money."

But Thompson disagreed, saying the district's claim of getting a good deal per square foot was based on the purchase price and didn't include future costs that might be incurred if substantial renovations or remodeling is undertaken.

According to documents obtained by the Sun, district officials first visited the Larry Glenn Townes Administration Building March 22 and had made an offer to buy the property a week later. The tentative agreement,signed by Garcia March 31, states that the deal is contingent upon approval by the School Board.

At a meeting that same day, the School Board heard a presentation from staff about the rising costs of construction. The School Board instructed staff to "research viable options as alternatives" to building a new facility.

By the time a presentation on possible options was made to the School Board April 14, staff had already committed to buying the Townes building, Thompson said.

An April 20 memo from Walt Rulffes, deputy superintendent of operations for the district, stated that the purchase of the building would solve some short-term space issues but was inconsistent with the district's long-range construction plans for nonschool facilities. The building's site offered limited parking and no space for expansion, Rulffes concluded.

"Their own guy said it wasn't the hottest idea they've ever had and then went ahead anyway," Thompson said.

It's standard procedure for district staff to negotiate tentative purchase and sale agreements prior to asking the School Board for approval, Rulffes said.

"We followed protocol all the way through," he said.

In the tentative agreement the building's owner and builder asked that in consideration of his willingness to reduce the sale price that the district name a school after his late son Larry Glenn Townes. Garcia said he explained to Townes' representatives an independent committee recommends school names to the School Board who have final approval.

"I told them if the (School) board thought it was acceptable, there might be a plaque of recognition placed in the building but that it was their decision," Garcia said. "I told the Realtor I don't offer promises I can't keep."

The original commercial property listing for the site describes the building as "posh," with private bathrooms with showers in the executive suites on the top floor.

"One could safely say the fourth floor is nicer than the district would have ever built on its own, but it ) was priced so low that it was a prudent buy," Rulffes said. "It was a better deal than paying more for something less, which is what we saw in a lot of the other properties we looked at."

District staff inspected more than a dozen buildings and "none of them were as good a buy or as functional" as the Townes building, Rulffes said.

"Other buildings were 60 to 70 percent leased. We would have had to become landlords for a few years while those were phased out or pay relocation costs," Rulffes said. "This place is empty."

It hasn't been decided yet which departments will move to the new building. The site could be sold in a few years when renovations and new construction at the Greer Education Center on Flamingo Road near Eastern Avenue is completed, Rulffes said.

"We believe it could be sold very easily and potentially for substantially more than we paid for it," Rulffes said.

Thompson said in his 35 years as an attorney "I have never visited an office building that was any more ornate or fancier" than the one purchased by the district. Thompson, who based his judgments on photographs of the exterior and interior provided by the district's real estate office, said the decision to buy would come back to haunt the School Board.

"They're paying for an overly fancy building at the same time that they're up at the Legislature crying that they don't have enough money," Thompson said.

Carole Vilardo, president of the Nevada Taxpayers Association, said it was incumbent upon the district to convince the public that the building's purchase was fiscally responsible.

The district needs to show that the cost of the building in the long run will be a better value than continuing to pay rent and also that a cheaper building in an equally desirable location wasn't available, she said.

Without inspecting the building herself, Vilardo said, she couldn't comment on whether the amenities were appropriate or veered into lavish territory. But even if there are upgraded light fixtures, carpets and marble floors in the reception area, it may still have been a good deal, she said.

"Is everybody going to agree with the purchase? Of course not," Vilardo said. "But it appears the sale price was under the appraised value, and it's a desirable, central location, which are two things that are hard to find given the real estate market in Las Vegas. On the face of things it appears to be a decision well made."

That doesn't mean the public shouldn't question such purchases and demand hard proof of the necessity, Vilardo said.

"A parent's first priority is what does my child need, not what do the administrators say they should have," Vilardo said.

Thompson also raised questions about the timeline for the signing of another document, escrow instructions, by School Board President Larry Mason and Denise Brodsky, the board's clerk.

While the first page of the document, prepared by the title company, is dated April 8, nearly three weeks before the School Board approved the building's purchase. While Mason and Brodsky's signatures appear on the fourth page there is no accompanying date.

Thompson said the document suggests Mason and Brodsky gave their approval to the building purchase before the School Board voted on the matter. But Matt LaCroix, assistant director of real property management for the district, said that was not the case.

It's common for district staff and the title company to draft documents ahead of time for the School Board to sign later, LaCroix said.

"The question is, can Larry Mason independently sign a document and initiate a real property transaction without the approval of the full (School) Board, and the answer is no," LaCroix said. "Whatever he signed wouldn't be legally binding and it would make no sense for us to seek out his or Mrs. Brodsky's signature before it was appropriate."

An amended copy of the escrow instructions were signed by Brodsky and Mason and dated April 28, the same day the School Board approved purchasing the building.

Brodsky said Tuesday she did not believe she signed the document prior to the full School Board voting on the purchase. To avoid confusion in the future, however, Brodsky said she intended to make sure the correct day's date accompanied her signature on future documents, a plan LaCroix endorsed.

School Board member Sheila Moulton, who served two terms as president from 2002 to 2003, said she knew of no instance when district staff had ever asked officers to sign such a document prior to getting approval for a purchase from the full School Board.

"I can't see that something like that would ever occur," said Moulton, who voted against the building's purchase on the grounds that it would send "the wrong message" to students, parents and staff struggling to thrive in under-funded and over-crowded schools.

For Thompson, the underlying problem is what he called the School Board's willingness to cede authority to the district's staff, specifically Garcia. The School Board follows "policy governance," a management style that calls for the superintendent to act as chief executive with School Board members representing the "customers" or "stakeholders."

"If Carlos Garcia says 'Follow me' and walks right off the edge of Hoover Dam, five of them (on the School Board) will follow," Thompson said.