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Chamber recommends IPS explore selling real estate

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Indianapolis Public Schools should immediately consider selling five of its major buildings and work with the IndyGo bus service to transport students, according to an operational analysis of the school district spearheaded by the Indianapolis Chamber of Commerce.

The Chamber analysis, released Monday morning, also encouraged IPS to lease unused space in its buildings to other schools and community groups, among other recommendations.

The report is the product of eight months of work by a group of 60 business leaders, IPS board members, IPS executive staff and Indy Chamber staff. The group was chaired by David Lewis, the chief tax executive at Eli Lilly and Co., and Joe Slash, CEO of the Indianapolis Urban League.

IPS requested the Chamber’s help last year, as it faced a $30 million budget deficit, due to years of declining enrollment. IPS now has nearly 30,000 students, which ranks it as the second-largest school district in the state.

"IPS is in a unique position at this moment to assess our challenges and improve our ability to operate more effectively and efficiently," said IPS Superintendent Lewis Ferebee in a prepared statement. He added that the Chamber’s operational analysis will be used in IPS’ strategic planning process.

The buildings that IPS might be able to sell immediately are:

— The former Coca-Cola Bottling Plant on the northeast corner of Massachusetts and College avenues, which now is a bus maintenance facility
— The former Ford Assembly Building at 1325 E. Washington St., currently a storage facility
— The IPS administrative building at 120 E. Walnut St.
— School 616, known as the Key Learning Community high school, at 777 White River Parkway West Drive
— School 316, known as the Cold Spring Environmental Magnet School, at 3650 Cold Spring Road

The Chamber analysis also encouraged energy assessments on all IPS buildings and recommended creating multi-use facilities.

For example, IPS leased 19,900 square feet this year in its Gambold Preparatory Magnet High School, along West 38th Street, to the Enlace Academy charter school for $90,000 a year. The Chamber analysis estimates that IPS could bring in $4.6 million if it leased out all the unused space in its classroom buildings. The Chamber report estimated that the unused space could house more than 24,000 students.

Charter schools within IPS’ boundaries last year enrolled nearly 12,000 students. Many more charter schools have been approved to open within the IPS district in the next few years.

Ferebee has drawn both praise and criticism this year for embracing House Bill 1321, which would make it easier for IPS to lease unused space in its buildings to charter schools. The bill, which is pending in the Indiana General Assembly, has drawn fire from teachers unions because it would also allow IPS to turn schools over to private management teams that would use non-union teachers.

On transportation, the Chamber report suggested that IPS work with IndyGo, the city-run bus service, to create a special pass for IPS magnet students to use IndyGo buses to get to and from school. Magnet schools draw students from throughout the IPS district, making bus routes far more complicated than they would be for neighborhood-focused schools.

The Chamber analysis also recommended that IPS keep tighter control on its contracts with outside vendors, shift its storage operations to an actual warehouse, hire a chief educational technology officer to streamline technology planning, benchmark its financial metrics against other urban public schools, and conduct a survey of IPS employees for further ideas.

“Our team of highly skilled, dedicated business volunteers, along with IPS executive staff and board members, worked strenuously to evaluate every aspect of IPS operations to formulate strategic and sustainable recommendations that, if carried out, will put the enterprise on stronger financial footing,” said Michael Huber, CEO of the Indianapolis Chamber, in a prepared statement.

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  • Real Estate Values
    What took so long for someone to recommend that IPS sell some of its real estate? Why didn't IPS think of it themselves instead of always crying that they don't have enough money? Additionally, IPS needs to evaluate the underlying real estate when determining what schools to close. For example, the school at Keystone and Kessler...that is prime, valuable property where a school is situated and should not be there today. It's a busy intersection, dangerous to students, etc. and worth a lot of money. The school is only partially used to boot. Do some simple financial analysis...or basic math!
  • To Sell or Not To Sell...
    A little known fact: IPS is sitting on a small fortune in Indiana art. There are many, many magnificent paintings by renowned Indiana artists moldering away, uninsured, uncared for, in many IPS buildings. I understand that most, if not all, of these artworks were donated with the proviso they remain in these buildings, but isn't there some way they could at least be pulled into an exhibition, and that exhibition sent around either the State or the country, to generate some funds?
  • IPS maintenance
    I did not read deep enough yet to see if there is a recommendation for the IPS maintenance depot just off of 16th street. My recommendation would be to issue an RFP to have maintenance performed by independent contractors. They could dispose of a lot of equipment and property and maintain a small staff to monitor the quality of x number of outside contractors.
  • Leverage
    I think if they sale the Coca-Cola bottling plant any deal should include building or swapping an actual warehouse. They sould set this deal up like dominos--Sell the Coca-Cola plant (get cash/warehouse or just a warehouse)--move out of the former Ford Plant on Washington St--sell it (probably to Angie's List. If the new justice center is built they might look at moving their operations into some of the space freed of from the courts leaving the CCB and then sell that building. Selling the Key Learning Center might be premature until a final plan is set for the Old GM plant. If they build housing there they might be able to boost their enrollment. IPS is going to have to get creative or the taxpayers of Center Township are just throwing good money after bad.

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  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

  2. $3B would hurt Lilly's bottom line if there were no insurance or Indemnity Agreement, but there is no way that large an award will be upheld on appeal. What's surprising is that the trial judge refused to reduce it. She must have thought there was evidence of a flagrant, unconscionable coverup and wanted to send a message.

  3. As a self-employed individual, I always saw outrageous price increases every year in a health insurance plan with preexisting condition costs -- something most employed groups never had to worry about. With spouse, I saw ALL Indiana "free market answer" plans' premiums raise 25%-45% each year.

  4. It's not who you chose to build it's how they build it. Architects and engineers decide how and what to use to build. builders just do the work. Architects & engineers still think the tarp over the escalators out at airport will hold for third time when it snows, ice storms.

  5. http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing

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