Marshall Middle School playing chip

This is a copy of an email......

From: Peter Caron [mailto:pcaron@lynnma.gov]
Sent: Wednesday, July 31, 2013
To: +++++
Subject: RE: New Marshall School Land

+++++,

Actually, we took the vacant lots for $1.3M back in April, but it appears that the owner will be contesting the award, so it may end up being higher if the courts find the City’s appraisal is too low. Basically, a judge will listen to both sides and decide what is the proper amount the City should pay. The $4M figure was estimated by the Project team earlier in the process, and they conservatively estimated on the high end so as not to create an overrun cost right off the bat.

We have not taken the houses nor had appraisals done, nor will we do so until when and if the taxpayers the taxpayers approve the borrowing. No point in buying houses unless we will actually need them. We needed to buy the large lots immediately, however, so that the necessary soil testing could be done to firm up the construction costs. The assessed value of those two houses for FY2013 was about $300K total, so if we do acquire them, the awards should total less the $400K. In my opinion, the eventual total acquisition cost for all the parcels if we go forward will likely be well under the $4M figure estimated by the management team, possibly, at worst, in the $2.5M range.

Two things to consider about the cost: a) the site acquisition cost should be compared with the relocation costs of finding alternative classroom space elsewhere in the city to house Marshall students while a new school was built on the existing site, and b) some of the cost can be recouped by selling the current Marshall site once the move to the new location is complete. The school department could probably provide an accurate estimate, but relocation costs would be substantial, possibly even more than the acquisition costs for the new site, not to mention the disruption to students and staff, especially considering that the system is already facing a space crunch.

*Another thing to keep in mind is that the taking of the Brookline site solved a difficult political and legal problem for the City. The owners of the property were proposing to build a significant apartment complex on the property. Although they claimed it would be occupied by higher end, market rate renters, both City officials and neighbors were skeptical and concerned that the site would end up servicing a lower income, section 8 population, which would negatively affect the neighborhood. In addition, there were legal concerns that the City might not be able to prevent the proposed project from going forward. The takings eliminated these problems by providing a property use that was politically more acceptable to City officials and neighbors.

Finally, I cannot stress enough that the vote by voters in September will not be a pocketbook vote, i.e., regardless of whether the bonding is approved or rejected, there will be no net effect on tax bill amounts for taxpayers. No taxpayer will pay more if the bonding is approved, *nor will they pay less if it is rejected. Unlike the votes typically taken in other communities for school projects, the proposal in Lynn is not a debt exclusion vote as those votes in other communities typically are, i.e., in other communities, voters decide whether they wish to accept a temporary tax increase to fund all of part of the borrowing costs over the life of the bond. The vote is Lynn is required by charter, but neither the school committee, nor the mayor, nor the City Council has proposed to make this a debt exclusion vote. Therefore, under the restrictions of Prop 2-1/2, the Mayor and City Council will need to pay for the borrowing costs out of the existing city budget, i.e., they will have to reallocate resources from elsewhere in the budget to cover the cost without increasing the overall bottom line of the budget.

*However, some of that reallocation cost will be mitigated by new growth expansion of the tax base by ongoing projects such as the Kettle Cuisine and Market Basket projects, as well as anticipated development on the Beacon Chevrolet site and the GE gear plant and old Morgan hotel sites along the upper Lynnway. In addition, bonds for the English and Classical projects will be coming off the books in the next 4-5 years, so that the total bond payments for the City for FY2019 with a new Marshall bond on the books will be approximately the same as they are now. Therefore, voters will be deciding whether the school project is important enough so that elected officials need to find the money within the existing budget to fund the City’s share of the cost.

Hopefully this answers everyone’s questions.
Peter M Caron
Director of Assessing

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