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Gary schools hit the real estate market

Gary schools hit the real estate market


GARY — Vandalism, looting and arson have plagued abandoned Gary public school buildings for years amid dwindling enrollment, towering debt and tax liens on properties that long-tied the hands of district officials. 

Now, city and school officials hope to soon end that chapter and turn a new page as the beleaguered Gary School Community Corp. places 33 properties on the market under the crushing weight of $100 million-plus in total debt.

"We have not been a good neighbor with these abandoned properties over the last 20 years as the school fell into financial distress," said Gary Emergency Manager Peggy Hinckley, who was appointed last year to dig the cash-strapped school district out of the red. 

In abandoned and boarded-up schools, homicide victims' bodies have been discovered over the last several years, including in 2015 when a 17-year-old girl was found murdered inside the former Emerson school building, 716 E. Seventh Ave.

"We had the three homicides, and we continue to have a lot of fires," Gary Council President Ron Brewer said. "It's a constant drain of our resources." 

Gary Mayor Karen Freeman-Wilson said the Gary Fire Department has responded to six arsons in the past 12 months, including twice at Horace Mann High School and Ivanhoe Elementary, and once at Lew Wallace and Washington Carver. 

"While I can't tell you how much it costs each time we respond, I can tell you that if our crews are responding to a school, and there’s another fire, that presents a challenge in the community," Freeman-Wilson said.

Over the years, many of the schools have been hit by arson, or accessed by squatters and gangs, tagged with graffiti and looted for left-behind school equipment and other valuables. 

Today, many of the buildings are afflicted by broken windows, scribbled graffiti and overgrown weeds, lessening the viability of the properties over time. But officials hope bidders look at the properties' locations and potential, rather than fixating on the structures as barriers to redevelopment.  

Hinckley said she understands some of the properties are more marketable than others.

Horace Mann High School on Garfield Street was hit by an arsonist in May 2017, its auditorium destroyed in the blaze. Three months later, in the city's Glen Park neighborhood, another suspicious fire was set to the former Lew Wallace High School.

'A starting point'

Brewer, Freeman-Wilson and Hinckley have expressed hope but remain cautiously optimistic as to how quickly properties can sell.

Asking prices range as low as $39,300 for undeveloped land at Mount Street and Ninth Avenue to as high as $5.85 million for Dunbar-Pulaski Middle School — a school shuttered in 2015 because of poor performance.

The hope, Hinckley said, is to sell as many properties at the best asking price based on values determined by the county assessor's office.

"We have no illusion the properties are worth this much, but it's a starting point," Hinckley said. "We know we have properties with deteriorating buildings, and that places a negative value on there. Whoever buys it would have to tear down."

Officials will factor that into any bids they receive, she said. 

Hinckley said donating the properties will be a last resort after all other options are exhausted as members of the Indiana Distressed Unit Appeals Board desire the district to bring down its long-term debt. 

The financially troubled Gary school district last year was put under the control of a state-appointed emergency manager after trustees repeatedly failed to match the district's spending to its declining revenue and racked up more than $100 million in debt.

Crippling the district's ability to crawl out of debt has been the multiple liens on abandoned school properties. Only recently did the Internal Revenue Service approve a $320,000 settlement with the district, wiping clean more than $8 million owed to the federal government and removing the liens.

That elimination of debt and liens provides the flexibility needed to sell the more marketable properties.

Marketable to not-so-marketable

School officials first began attempting to sell buildings in 2010 when they were being squeezed by charter schools, declining enrollment, reduced tax collections and decreases in state funding, but many of the deals fell through. Even in cases where schools were sold off for a small price, buyers have done little to redevelop the eyesores. 

Wirt-Emerson School for the Visual and Performing Arts in the Miller neighborhood held its final graduation last month as part of a move to consolidate the district's two high school buildings into one. Its high school students and programs will merge with West Side Leadership Academy.

Wirt-Emerson's location less than a mile from Gary's Lake Michigan beaches makes it a prime location "bound to be attractive" to market-rate housing developers, Hinckley said.

Freeman-Wilson said the Nobel Elementary School site also is marketable, given its proximity to Lake Michigan and the surrounding stable home values. George Washington Carver, 2535 Virginia St., is in a prime commercial location right off the Borman Expressway west of the I-65 interchange.

Gary airport officials have expressed interest in the past for the nearby shuttered Thomas A. Edison Elementary property.

The city is hoping to attract investors to the Benjamin Franklin property, listed for $1.4 million, for multiuse development, including mixed-income housing.

Freeman-Wilson said the city may be able to leverage the property as it seeks a $30 million implementation grant from HUD to improve the neighborhood and create affordable housing. 

Two-stage bidding process

Official notice of the properties being open for bid appeared in local newspapers on July 2. 

Under the state's takeover law, Hinckley said local taxing districts, such as universities, colleges and libraries, have first right to make a purchase offer. That 30-day window runs through July 27. 

The legal notice requires Hinckley provide Freeman-Wilson's office with 30-day written notice prior to selling off any assets, and that any concerns or objections raised at that juncture should be taken into account in consultant with the mayor. 

"The sooner we can move these properties along, the better," Hinckley said. "But it does not mean we just want to unload them for anybody. We want to be good neighbors in understanding the use proposed by bidders may not be compatible with the neighborhood. We have to be sensitive to that."

Hinckley said there will be some level of community input, particularly in cases in which intended use of the property is questioned. 

Once the first phase is over, the bidding process will open up to the general public over a 60-day period. That period runs until Aug. 24. 

Tracy Coleman, the district's attorney with Robert L. Lewis & Associates, is handling bids, Hinckley said. 

Hinckley said the Bethune Early Learning Center, shuttered at the end of the 2019 school year, is listed for sale.


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North Lake County Reporter

Lauren covers North Lake County government, breaking news, crime and environmental issues for The Times. She holds a master’s degree in Public Affairs Reporting from UIS. Contact her at or 219-933-3206.

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