For 20 years in some cases, public school buildings in Gary, Indiana, have sat vacant as a target for vandalism, looting, and arson. Now, the Gary School Community Corporation is hoping real estate investors with an eye for community development will come into the area, buy the buildings, and help the community and local real estate recover from that neglect.
“We have not been a good neighbor with these abandoned properties over the last 20 years as the school fell into financial distress,” observed the city’s emergency manager, Peggy Hinckley. She was appointed in 2017 to help the school district find a way out from under more than $100 million in debt.
School Buildings Sales are a Starting Point for Change
The school district’s real estate offerings cross a wide range of value, from undeveloped land to an entire shuttered middle school. The land is listed for less than $40,000; the middle school for $5.85 million. The district will consider all offers, Hinckley noted, because “we have no illusion the properties are worth this much.” She called the list prices a starting point and added, “We know we have properties with deteriorating buildings, and that places a negative value on there. Whoever buys it would have to tear it down.”
The school district was unable to list the properties previously due to large liens on many of the buildings. Recently, the IRS approved a $320,000 settlement that wiped more than $8 million in debt owed the federal government. Investors purchasing the properties would need to factor in any remaining debt on those properties when making the purchase.
“As active real estate investors and local residents in Gary, we’re actually thrilled to see this finally happen,” said Tom Olson of Good Success, a local real estate education company. “Not only is this good for the community because those properties are under-developed and undeveloped in many cases and can now be leveraged in a variety of more productive ways; it is also great news for investors and developers with vision who may acquire these properties and could literally transform the area if they opt for demolition and new development.”
Olson himself has been personally and professionally dedicated to Gary’s revitalization for several years. He will host Good Success’ first “Community Go-Giver” event, an investment and training opportunity designed for visionary real estate investors interested in the opportunities available in communities on the cusp of revitalization. The event takes place July 25-27, 2018.
A New Message for Gary, Indiana’s Real Estate Investing Community
The decision to list these properties on the part of the Gary school system and to forgive some portion of the tax debt on them on the part of the IRS could portend a change for the broader community. Other indicators include city planning agencies hosting architecture tours with the stated intent of “changing the narrative” about their hometown. Additionally, current mayor Karen Freeman-Wilson has focused on relieving blight and “using art as a catalyst for change” in the community.
The highly practical move to bring real estate investors into the equation is indicative of the local government’s dedication to effecting change – something that has been questioned locally in the past. The inclusion of the IRS in the equation could mean the community is more likely to enjoy federal and state support for these efforts as well.
“We’re looking at a unique point in time when the city is working to change its own culture and, as investors, it is a unique position because we can be a part of that change,” Olson noted. “Gary has always been in a prime geographic location and now with housing affordability more of an issue nationally than ever before, we are truly in a rare position as investors to alter the course of our community’s development for the better while building up our own businesses and portfolios at the same time.”