No extension or new purchase agreement accepted for Kingsbury Middle School

It's back to the drawing board for the Douglas County School District (DCSD) Board of Trustees after they officially decided to not give Patrick Taylor and Lake Parkway LLC another extension in their effort to buy Kingsbury Middle School.

Citing no confidence in the buyer's ability to put a deal that can close together, the trustees voted unanimously to take the steps needed to put the old middle school back on the market.

"I think the School District made a poor decision today," Patrick Taylor of Lake Parkway LLC told South Tahoe Now. "They are very unrealistic."

After being on the market for four years, in July 2016, DCSD accepted a $3.15 million offer from Taylor's group to buy the 22.4 acre parcel on Echo Drive that was home to the district's Kingsbury Middle School. They gave him one year to get the necessary zoning changes and financing together to buy the property for what he said would be 412 units of affordable housing. He also put $15,000 into a non-refundable escrow account.

The offer for the school was originally $3.125 million, but with the District paying the monthly utility bill of $4,000 to $8,000 (depending on the season), they raised the sale price to $3.15 million to cover these bills while the property was in the year-long escrow.

At the original escrow deadline of July 24, 2017, Taylor worked out a deal with the District to put an additional $40,000 into an escrow account to get the deadline extended to July 31.

Just as before, escrow closing by the deadline did not happen.

Taylor attempted to outline a new deal with the board in front of a packed house at the Lake Tahoe Visitor's Authority Stateline office, but the Board's only option today was to either accept or not accept an extension on escrow of the original purchase price.

He was asked if he'd be willing to deposit more earnest money into escrow, Taylor said no due to the high risk the property comes with as there is no TRPA guarantee of the zoning changes.

"I'm not going to pay any more," he said.

This week Taylor asked to see the property's two original appraisals completed prior to the 2012 listing of the school. Their original listing price of $4 million was based on the higher of the two appraisals. The second one came in at $2.5 million Taylor said.

Taylor's offer Tuesday was $2.5 million if closed in 60 days, $2.750 if closed Feb. 8, 2018, $3 million if closed by June 8, 2018 or $3.125 million if closed on Sept 8, 2018. He said if the Board were to receive a valid offer during that time he would have a first right of refusal.

It wasn't up to Taylor and Lakepark LLC to renegotiate a deal as a new sale price would legally require a future Board meeting to approve, or not approve, the transaction.

"How do we know it'd sell if we gave you another extension?" said Trustee Karen Chessell asked of Taylor.

Just three members of the public spoke up during the meeting even though most chairs were full of people interested in only this one agenda item.

"You run schools very well, but you don't do this very well," said Steve Teshara of the real estate dealings. "I hope today you stay on task," he said. "You're not a land use agency."

There is doubt the Tahoe Regional Planning Agency (TRPA) would rezone the school property to housing or to any other use.

The other two speakers disagreed.

"There is no risk to the district to open this back up," Greg Felton said of putting KMS back on the market. "Last week you heard from two people who are very interested in purchasing it."

Curtis Fields, a 39-year County resident agreed. "There is no rush, you have time to do this," he said. "You're not bound by a disaster." He was referring to Teshara's comment that the aging school was a health hazard and eyesore.

"I think the School District made a poor decision today," said Taylor. "I think it was a fantastic opportunity. They are a very unrealistic Board, but I am not surprised."

Lake Parkway LLC also put an offer in to buy the old Wells Fargo Bank at Stateline

"The seller was unrealistic," said Taylor of the deal falling through. His plan was to make the property mixed-use with 56 affordable housing units and retail/restaurant spaces utilizing the coveted drive-through option the property came with.