OMS petition comes to fruition on Nov. 5 ballot

Wednesday, November 6, 2019

A petition calling for the Okoboji Middle School building to be sold via a public bid process will have its day at the polls next week. The issue will share the Nov. 5 ballot with three open seats on the Okoboji School Board.

The petition for public bid was submitted to the Okoboji School District shortly after the school board voted July 19, 2018, to sell the property to the Imagine Iowa Great Lakes Beautification group for $1.1 million. The previous April, the public had approved a $25 million bond issue to finance the construction of a new middle school near Okoboji High School, as well as other improvements to district buildings. The $1.1 million sale of the property was to be used to pay down the bond. Local businessman Tom Clary felt the sale was rushed and a public bid could bring a higher price. Okoboji School Superintendent Todd Abrahamson said the district followed the state code in preparing for the most recent sale agreement, and received only two bids — one formal bid of $1.1 million from Imagine Iowa Great Lakes and a verbal bid of $1.15 million from local businessman Neil Slater the night of the district’s public hearing in July of 2018. Clary and others drafted the successful petition to put the issue to a public vote within 10 days of the board’s vote. The Imagine group backed out of the sale soon after the petition was submitted.

A local ballot item committee called Citizens for Excellence in Okoboji Schools has been advocating for the public to support next week’s ballot measure asking the district to sell the middle school property to the highest bidder and apply the proceeds to the district’s debt. Clary founded Citizens for Excellence in Okoboji Schools in 2015, as the district was proposing a physical plant and equipment levy to generate $14.7 million for a new middle school building.

The school property is exempt from taxes, and the Dickinson County Assessor’s Office listed an assessed value of almost $5.9 million for the middle school at the time of the school board’s July 2018 vote — a figure the Citizens for Excellence group compared with the $1.1 million bid from Imagine. However, staff with the Dickinson County Assessor’s Office explained the property may not necessarily sell for its assessed value, and the county office is not tasked with valuing properties for the purpose of sale. Rather, the middle school’s assessed value is a function of the building’s square-footage, number of rooms, facility improvements and the lot itself. The property’s value has fallen a little more than $100,000 since the ballot it’s petition was submitted.

Jim Verschoor, commercial appraiser with Tri-State Valuation and Consulting of Sioux City, prepared a Jan. 31, 2018, appraisal for the district and said large differences between appraised values and assessed values are common with school buildings.

“Typically, when you’re talking about a special purpose property like this, the assessed value to a large extent is going to be based on the cost to build a similar property, versus physical deterioration,” Verschoor said. “But what it doesn’t take into consideration is obsolescence factors if a property sells for something else.”

Verschoor went on to explain he calculated the appraisal after estimating a $1.45 million value for the 140,000 square-foot lot and subtracting approximately $300,000 for demolition and removal of the school building. He said school properties like the middle school are typically sold for alternative uses, rather than continuing as schools, and either remodeled or demolished.

“The problem is, with properties like this, they’re really not designed well for another use,” Verschoor said. “You can hardly pay anything for it and still have it be feasible.”

Clary feels Verschoor’s appraisal did not adequately account for the value of the middle school lot’s location in the Lakes Area.

“That thing was strictly boiler-plate, and the comparables had no value,” Clary said. “That corner up there is one of the hot spots, if not the hottest spot in the whole Lakes Area.”

Verschoor said a lack of comparable sales is also a common issue when selling school buildings.

“That’s always a criticism, when somebody doesn’t like an appraisal, ‘None of these comps are like the property being appraised,’” he said. “But the problem is you can only use the comps you have, not the ones you wish you had.”

Verschoor went on to note his appraisal is almost two years old at this point, and a more recent report may yield different results.

Clary said some in the community have expressed fear approval of the ballot measure could force the district into selling the property to an unsavory business development — specifically a casino or adult entertainment venue — simply by virtue of the high bid. He postulated bid guidelines could potentially be used by the school district to curtail those possibilities.

“Whether the measure passes or not, the school board has and maintains control over the sale of property,” he said.

Clary and the Citizens for Excellence committee hope to form what they call a Community Marketing Team made up of city, school and business officials to help guide the district’s bidding process — should the ballot measure pass. Abrahamson said decisions regarding the sale and potential bidding process will wait until after the Nov. 5 ballots are tallied. He was hesitant to comment on how receptive the school board might be to the plan proposed by Citizens for Excellence, noting three of the five seats on the board will be filled by new faces this election cycle.