Feature: Wednesday, August 20, 2003
Remedial Math

The figures don’t add up on Fort Worth school land deals.


In 1997, the Fort Worth school district was briefly in the apartment business. That year, the district paid $1 million for a run-down 100-unit apartment complex on Weiler Boulevard next door to Eastern Hills High School. The sale marked the eighth time the apartments had changed hands in little more than a decade. When critics howled about the district spending such a princely sum for a seedy apartment complex, the board announced it had bought the apartments to restore and rent them out as temporary housing for new teachers moving into the district. But after the district spiffed up two units and found that new teachers weren’t interested, the apartments were quietly converted into office space.

Now the district is in the printing business — or at least, it owns a printing plant that is still operating. But that plant will soon move to better quarters and turn the empty buildings over to the district, which may discover that converting an industrial plant to suitable educational use is not as easy, or cost effective, as turning apartments into offices.

Motheral Printing occupies a sprawling complex of buildings on the city’s Near South Side that was bought by the school district three years ago for $3.6 million. The plan was to build an elementary school there and name it for late board president Gary Manny. For its money, the district got nine buildings, eight acres of land, the historical Coca-Cola bottling plant — and unknown quantities of toxic pollutants and asbestos.

The board voted for the purchase before an environmental study had been done at the 67-year-old plant site. That study found asbestos problems. Now Motheral has been cited for 15 serious violations of the state’s anti-pollution laws, and the board doesn’t know when the next shoe will fall. No one knows the extent of the pollution or the costs of cleaning it up. But the bill — almost certainly to be paid by the district — could be in the millions, said trustee Juan Rangel.

Rangel is angry. He wasn’t on the board when the decision was made to buy the Motheral plant, but he represents the area now. He wants to know three things from those who made the decision: “Were we misled? And if so, do we have any legal recourse? And if not, why not?”

Lon Burnam, who represents the area in the Texas House, was more blunt. “It would take an idiot to think it’s a good idea for a 67-year-old printing plant to be turned into a public school.”

But in this district, getting answers to such questions may be harder than finding the toxins at the Motheral Plant, which is turning out to be the worst of several puzzling real estate deals the district has been involved in over the past three years, deals that seem to have been more favorable to the private parties involved than to the public.

Between 1997 and 2000, the Fort Worth school district spent close to $12 million on six large property acquisitions. All of the properties were located in depressed or stagnant economic areas. At least two parcels were home to businesses that wanted to move to better locations. Five had owners with long-standing ties to the city and its leaders.

Besides the printing plant and the Weiler apartments, the district bought the old Stripling-Cox department store in the 2500 block of Berry Street for $1.4 million; Ellison’s furniture store on the far west end of Camp Bowie Boulevard, $1.9 million; the Edna Gladney Center, 2300 Hemphill St., $2.85 million; and Temple Beth El, on Broadway, $986,000.

During that time, the district also sold off two parcels of prime property that it had held for almost half a century, bringing in $3.7 million but also vastly increasing the worth of three of Fort Worth’s influential groups.

The Kimbell Art Foundation paid the district $3.1 million for its former administration building on Lancaster, a price that was at least close to market value at the time. The other sale, which was well below market price, remains inexplicable even to the real estate company that facilitated the deal. Twenty acres of prime land in the 3900 block of South Hulen Street were divvied up between Congregation Beth El and McKinney Memorial Bible Church for a total sale price of $566,000.

On the morning of Aug. 14, David Motheral was asked by Fort Worth Weekly if his family’s printing plant had any pollution problems. “None,” he said. “I have a certificate from the [Texas Commission on Environmental Quality] that gives us a clean bill of health.”

But the school district has an environmental report that shows asbestos contamination in the main buildings. And at noon that day, TCEQ spokesperson Adria Dawidczik told the Weekly that the agency had just issued a citation to Motheral Printing Company for 15 violations of the Texas Clean Air Act and one “area of concern,” all resulting from an inspection conducted at the plant in May by Fort Worth’s environmental management department. The city found violations “serious enough,” Dawidczik said, to trigger the state to take enforcement action against Motheral.

The inspectors’ findings included numerous serious failures to abide by state and federal regulations and permit requirements. The company had not reduced its overall emission of volatile organic compound (VOC), and had exceeded limits on some of those compounds by as much as 53 percent. Its catalytic oxidizer, the burner that is supposed to reduce the company’s VOC emission by 90 percent, was not operating properly and the company had failed to perform or record various tests and inspections, including what it was finding in the ash in its incinerator. Air-pollution-causing materials had been left sitting uncovered.

The end result: Just as neighbors had been complaining of for months, the plant was causing “an off property public odor nuisance” — the investigator himself reported that he had “experienced nausea, dizziness, [and] irritation to the eyes and nasal passages.”

Missing were maintenance and inspection records, raw-material inventories, emissions reports, and the required documents that tell workers how to safely handle inks, solvents, and other potentially dangerous materials the plant uses.

All of the violations require “immediate compliance” the state wrote to Motheral, and it further ordered the company to “immediately abate the site emissions” that caused public distress.

Dawidczik said she had no idea what kind of “clean bill of health” certificate Motheral was talking about. But she did know that the site has some serious pollution problems.

The printing company’s been in Fort Worth for more than 80 years. For 67 years it’s been a fixture at 500 S. Main St. It currently provides 275 jobs in an operation that runs 24 hours a day, 7 days a week. It operated there for more than 25 years before there were any environmental laws. That worries many people, especially now that the Fort Worth district wants to put a school there.

The district, which has owned the 8-acre plant site since May 2000, will be liable for the cleanup of pollutants after Motheral leaves, according to both Dawidczik and Fort Worth environmental department head Brian Boerner, unless the district made a prior agreement with the company that would have forced Motheral to clean up any mess it left behind. So far, no records have turned up showing that there is such an agreement.

Nearby residents say they are angry because the district’s been ignoring complaints from the neighborhood about the sickening fumes and odors coming from the plant for the last two years. According to one neighbor, the worst of the pollution occurs at night, when emission plumes are invisible.

On May 9, Jarid Ni’al Manos, founder and executive director of the Great Plains Restoration Council, whose office is a few yards from the main plant, had had enough. The fumes from the smokestack were so strong that day that he couldn’t breathe outside without getting sick. The fumes were “metallic” he said, and sometimes smelled like a burned-up radiator. On bad days like the one in May, he said, he gets headaches, loses his ability to think clearly, has an unpleasant metallic taste on the back of his tongue, and gets nauseated.

“I’m a healthy, 180-pound vegan who rides a bicycle every day and keeps in shape. I could only imagine what those emissions were doing to the children playing in the yards of the apartment building directly behind the plant,” he said. “Their small bodies are so much more vulnerable to toxins.”

On that May day, Manos picked up the phone, called the city’s environmental office and filed a formal complaint. Much to Manos’ surprise, inspectors from the city showed up within days. “I took them around,” he said, “and that day the odors were bad. I showed them how the fumes come out of a tall smokestack in back, and then the plant released some gases and they got a good strong dose themselves.” The city inspectors sent their findings to the state’s environmental enforcement agency, which issued the citation for violations this month.

“I had complained before,” Manos said, “even wrote a letter to then-Mayor [Kenneth] Barr about the Motheral operation, but never got a reply.” He had also complained to the school district and by mail to Superintendent Tom Tocco, he said, and got “no replies.”

Manos said many of the low-income residents and the hard-core poor of the neighborhood had been complaining to him also. “They are sick, their children are sick, but they are people who are fearful that if they challenge the system, they will be hurt, lose their jobs or their homes.” The Pennsylvania Place Apartments, home to hundreds of children, butts up against the plant property. That complex is one of the shining examples of the depressed area’s comeback, cited by groups such as Fort Worth South, a nonprofit community organization that’s been successful in revitalizing large chunks of the city’s Hospital District and Near South Side. The sprawling complex is a well-built and well-kept project that provides government-subsidized housing for low-income families.

There will be a need for a new school in the area, Manos said, but he questions the use of this site.

Although original plans called for an elementary school, the district now says it will move its high school for returning dropouts there from its current location at Trimble Tech a few blocks away.

Dawidczik said that when the inspectors showed up in the neighborhood, the “odors were so strong that they decided to do a full-plant inspection of the site.” The most troubling toxins in a printing company operation, she said, are petroleum-based printing inks, heavy metals, and volatile organic compounds. Printing plants are major contributors to greenhouse gases, according to the EPA’s web site.

The byproducts of printing plant operations contain some of the most harmful poisons on EPA’s list of health-threatening chemicals: toluene, silver, cadmium, copper, zinc, lead, metal hydroxide sludge, and crude oil. The toxins are emitted into the air, washed into water sources through run-off, and picked up in the soil. Often, in older plants that operated before there were any environmental laws, wastes were buried in pits in the ground and dangerous solvents were dumped down the sewers. These toxins can cause cancer, liver disease, central nervous system disorders, and birth defects.

At an old plant like Motheral, Dawidczik said, there is no way to know the extent of the pollution in the soil, the groundwater, or even inside the buildings without a full-scale environmental study. Such a study should have been done before the district bought the plant, she said. That way the district would have had two options: force Motheral to clean the plant to a standard that would allow a safe operation of a public school, or kill the sale.

But because the school board approved the Motheral sale before the district’s environmental report was complete and in their hands, trustees didn’t know about the property’s problems until a month after they bought it.

On June 20, 2000, the district received the first environmental report on the site. The Weekly was given access to only the last few pages of the 36-page report, prepared by Environmental Engineering &Geotechnics, Inc. In a single monitoring well, the company found low concentrations of select heavy metals, volatile organic compounds, isopropyl alcohol, and petroleum hydrocarbons. Groundwater analyses placed the tested site in a “Category III” use designation, which means that substances in the soil and water can pose a risk, dependent on the site’s intended use. The company recommended that Motheral get rid of an abandoned storage tank, clean up its “documented spills and leakages,” and vigorously adhere to state and federal environmental laws; otherwise the site wouldn’t be suitable for the district. No one from the district has returned the Weekly’s calls requesting a cost estimate on the clean-up.

Manos and others, such as retired Brig. Gen. Nathan Vail, Tocco’s most vocal critic over the past year, ask why the board approved such a potentially dangerous site without a complete and independent environmental study.

“From what I’m hearing, this whole scenario raises serious questions about what should have been on the minds of the board before it ever voted to buy the property,” Vail said. “Who wanted this property? Who pushed for it to be bought? Was there ever a plan?

“If there was a plan to build a school there, then the [environmental] questions about that site should have been answered before it was bought. Why didn’t [board members] inquire what the implications would be before they voted? Their responsibility is to know about such things as the environmental problems associated with a printing plant. They are the people’s and the children’s representatives.”

“I would have to know what’s in that soil and in those buildings before I would let my child go there,” Manos said. “And that’s the responsibility of the district and its superintendent, to let parents know” about something so potentially harmful to their children, he said.

Answers to their questions will have to come from Tocco, who Motheral said was the only person he dealt with at the school district when the deal was made to sell the plant. Tocco has not returned phone calls from the Weekly.

“I’m devastated about leaving,” David Motheral said in the interview earlier this month at his South Main Street office.

According to Motheral, who shares the responsibility of running the plant with his brothers, the family had never contemplated moving from its South Side location before being approached by the school district. And Tocco, he said, was the man who drove the deal. “I never worked with anyone but him,” Motheral said.

The printing company his grandfather bought around 1920 has been on South Main since 1936, when it was moved from the city’s central business district, Motheral said. Now the family plans to move it to CentrePort Business Park on the city’s northeast side.

“I’ve been involved in this community for 30 years,” Motheral said. “I never wanted to leave.” But it was obvious in 2000, he said, that Tocco wanted the property. “The district never went so far as to start condemnation proceedings, but it was made obvious that they were willing to do that if we didn’t agree to sell,” he said. “We negotiated with that thought in mind.

“This district does a lot of things right,” he said, “but real estate is not one of them.”

Not everyone believes his explanation. The printing operation was outgrowing the site and the plant was old and badly in need of updating to make it environmentally safe and more efficient. In fact, a source close to the transaction said that Motheral wanted out of the neighborhood and the school district’s offer couldn’t have come at a better time.

Motheral denies such talk. But at the end of the year, he will move the operation into a 200,000-square foot plant in which the family has invested $30 million in state-of-the-art digital printing equipment. It will be cleaner and more efficient and could double in size in a few years, he said.

Still he isn’t leaving without a little help — although not as much as he had wanted. Since the school deal was finalized three years ago, the Motherals have been lobbying Fort Worth for a tax abatement for the new plant. First they asked for 100 percent for ten years, which only drew guffaws from council members. “We’ve finally come to an agreement,” Motheral said. It will be “55 percent for ten years.”

In effect, the plant, which had paid a total of about $283,000 in property taxes in the prior six years, has been getting a 100 percent tax abatement since 1999.

When the district bought the plant, there was no way for Motheral to vacate soon, he said, so an arrangement was worked out whereby the company would lease the plant back from the district for around $1,000 a month — about the same as the rent on a two-bedroom apartment downtown — and continue to operate until it found a new site and had a new plant ready to move into.

Motheral said he is excited about the decision to move the Success High School to his plant site. “I am on the advisory board of that school,” he said, “and I know how badly a larger school is needed to help kids who have dropped out.”

Don Scott, president of Fort Worth South, said he’s sorry to see Motheral go, but he doesn’t agree completely with the decision to turn the property into a school. “I always thought it wasn’t real suitable for a school,” he said. And as for the old Coca-Cola plant, in which Motheral now stores paper, Scott hopes to see it turned into loft apartments. “There’s going to be a need in the future,” he said, “for another elementary school,” at the rate the area is seeing apartments go up and old houses restored.

If the district eventually decides not to build there, trustees may find themselves on the losing end again. The property is now valued on tax rolls at $1.6 million, less than half what the district paid for it.

At the 80-year-old Temple Beth El, just a few blocks north of the Motheral plant, no pollution problems threaten to vacuum up taxpayer dollars. But the former Reform Jewish synagogue, also bought by the district in 2000, will cost the public a small bundle nonetheless — in money lost from what critics call, at best, a dumb real estate deal and, at worst, a sweetheart deal that benefited a private group at the expense of taxpayers.

The same month that it finalized the Motheral sale, the district paid $986,000 to Congregation Beth El for the two-story, 37,000-square-foot red brick temple and its 1.5 acres of land on West Broadway. A few months later, the district put the place up for sale. Those with knowledge of property sales in the slowly recovering but still mostly depressed area say the district will never recoup its investment.

“The district may get $600,000” for the temple, said Fort Worth South’s Scott, “but not more.” Tarrant Appraisal District records set the value of the property and building at $377,308.

At the time of the purchase, district officials said they intended to turn the property into a performing arts high school. That idea never got off the ground. Nineteen months later, Tocco told the board the space was no longer needed and, in any event, the 75-year-old temple would be too costly to renovate.

The district has since asked Joan Kline, a prominent South Side developer, to find a buyer. Kine has been the driving force behind the revitalization of numerous historical properties in the area including the Homes of Parker Commons on Jennings in the former Fort Worth Central High School. She also put together the land deal for the Pennsylvania Place Apartments behind the Motheral plant. There’s even a building named for her at the old Edna Gladney Center on Hemphill, which the district turned into a Montessori school.

Scott is trying to push the sale of Beth El as a performing arts center. “A lot of nonprofits would like to lease space there,” he said, but “none have the money to buy it.” However, the temple may have a potential buyer, Joan Kline herself. The Fort Worth Business Press reported two weeks ago that Judy Harman, wife of Fort Worth Convention and Visitor’s Bureau head Doug Harman, said that she and Kline had “tossed around the idea of revitalizing and rehabilitating the former Temple.” Neither have returned calls from the Weekly. Whoever buys it, Scott said, “The district will take a big hit.”

On a recent summer afternoon, the once-grand old temple seemed eerily forlorn, its soaring stained glass windows splashing rainbows of light across a dusty, deteriorating auditorium. Mold is growing in some of its rooms. A large pile of reeking trash covered a corner of the street directly behind the stately building. Weeds had sprouted everywhere. The neglected state of the property upsets Juan Rangel. “We’re not very good stewards of our properties,” he said.

As with the printing plant, Rangel was not on the board when the district bought the temple property. But when the board voted to put it back on the market as “surplus property” in December 2001, he objected. Rangel said then that he wanted more time to talk to community leaders about how to make the best use of the historic old building in order to benefit the neighborhood. At the December board meeting, the Fort Worth Star-Telegram reported, Tocco told Rangel that the district had “already delayed selling the property for more than a year.”

In a recent interview, Rangel said he still hopes that the district can hang onto the temple and make it into a fine-arts academy to be linked to other schools in the area. Regardless of who ends up owning the property, he and Kline envision it as part of a “Community of Excellence” for the Near South Side, the trustee said.

Almost from the day the district bought the temple, however, it’s been trying to unload it. It was offered first to Broadway Baptist Church, its next-door neighbor, which finally voted against the sale after months of indecision. When that deal collapsed, Tocco recommended that the board put it on the open market, causing critics to ask why it was bought in the first place. The answer may lie in another land purchase by the district 36 years ago.

In 1967, the Fort Worth ISD paid $137,000 for 23 acres of former ranchland in an undeveloped area on the southwest edge of the city. The seller was Cassco Land Company, Inc.; the property had once been a part of the sprawling Cass Edwards family ranch. Cassco, the family’s development corporation, has a bent toward selling some of its land for the public good, and it imposed a stipulation that the property could be used only for a public school. “The district could never sell the land in the open market,” company spokesman Scott Walker said.

Today, that property runs along the west side of the 3900 block of South Hulen Street, now a prime development corridor with land values that range from $70,000 for residential-size lots to $300,000 an acre for commercially zoned parcels, according to the Tarrant Appraisal District. Twenty acres of this prime site, however, now belong to two of the largest religious congregations in the city, Congregation Beth El and McKinney Memorial Bible Baptist Church.

In an interview from his Hulen Street office, Walker said that sometime in early 1997, the school district, through former associate superintendent Eldon Ray, and representatives of the two congregations, approached Cassco with a proposal for the district to sell the land in separate parcels to the two groups. “The district had come up with the dollar amount it wanted,” he said, which was around $550,000 for the 20 acres, and considerably below market value at the time. The figure, Walker said, had been arrived at by the district based on the land’s original purchase price plus a factor for inflation and “possibly some interest.”

Because of the deed restriction, of course, the district couldn’t sell directly to any private-sector buyer, so it needed Cassco’s cooperation in working the deal. It had a precedent to fall back on. In 1985 the district had found a way to sell the other three acres of the Cassco land to the City of Fort Worth for the construction of the Southwest Regional Library, a deal brokered by then-FWISD associate superintendent Eugene Gutierrez.

In an interview from his home, Gutierrez, who had been the overseer of maintenance, construction, bond programs, and real estate transactions for the district before he resigned in 1995, said that he had negotiated the transfer of the three-acre parcel to the City of Fort Worth because of the city’s “great need for a library in that area.”

In that deal, Gutierrez said, he arranged for Cassco to repurchase three acres from the district for the original sale price plus a factor of increase for inflation. As soon as the parcel was sold back to Cassco, the company immediately conveyed it to the City of Fort Worth in a “flow-through” for the same amount. “It was a win-win for the public,” Gutierrez said, “and was readily approved by the school board. Cassco agreed to accommodate the library usage without releasing the ... restriction on the remaining 20 acres.”

State law requires an appraisal for fair market valuation and public solicitation of bids for the sale of land owned by public school districts in Texas, but because the three-acre parcel was conveyed from one taxing entity to another, the former administrator said, the deal did not require public bidding or an appraisal to determine the property’s market value.

“This was a unique transaction for the benefit of the FWISD and City of Fort Worth taxpayers,” Gutierrez said. “It was not envisioned as a method to side-step fair market valuation and bidding requirements in disposing of FWISD property to private sector groups,” he said.

In 1997, however, that was just what happened. Congregation Beth El and the McKinney Memorial Bible Baptist Church are private religious groups. Still, the district, through Ray, asked that Cassco facilitate the deal in the exact same manner as it had done for the library, Walker said, by buying the property back for the offered amount, then conveying it instantaneously to the two congregations for that same amount. There was no appraisal and no bid requests were posted.

Walker met with Ray a “couple of times,” he said, before the deal was finalized, but more often the company dealt with representatives of the church and the synagogue who were pushing the deal. The company agreed. Deed records show that on May 8, 1997, the district sold the 20 acres to Cassco, which immediately conveyed it in separate parcels to the two religious groups.

“Flow-through” is not a real-estate term, Walker said. “It was coined by Gene (Gutierrez) when we did [the transaction] for the library, but it well describes what happened.” Cassco owned the property “for just a few minutes,” he said, made no profit on the deal and only charged “a small increment” for its legal work. The final cost to the synagogue and church was approximately $556,000 “proportional to the acreage each bought,” he said. Beth El got 7 acres; McKinney, 13. At $27,800 an acre, the synagogue paid $194,000; McKinney, $361,000.

Walker doesn’t know why the district was willing to sell at below-market price, but Cassco went along with the deal, he said, because the district had failed to use the property for so many years. “We saw an opportunity for the land to be put to some other public use,” he said.

And because the churches got such a good deal, Walker said, Cassco imposed new deed restrictions before it transferred the titles, stipulating that the properties could be sold only to other nonprofits.

“We didn’t want [the religious congregations] in future years to sell the land for commercial use at some tremendous profit, when they hadn’t paid fair market value in the first place,” he said. This way, the company can keep community-based organizations in the area, he said, noting that the original tract sold to the district and an adjoining tract now house a regional library, a church, two synagogues, and the Texas Boys Choir school.

Appraisal district records show what a good deal the religious groups got. At 3901 S. Hulen, the Texas Boys Choir charter school sits on 4.8 acres of land that was sold in December 2002 by the McKinney church to the Texas Boys Choir Walsh Foundation. The property is zoned commercial, with a TAD appraised market value of more than $1.3 million for the land. Congregation Beth El’s property carries a 2002 tax appraised value of more than $7 million for the 7 acres and the new synagogue completed in 2000. McKinney Bible Church, which had not yet completed its huge new church in 2002, had an appraised tax value of more than $1 million for its property.

Walker wouldn’t comment on the wisdom of the district’s decision to sell the land below market prices. He did say that critics of the sale have a good point when they question why the district didn’t use the tract as the site for facilities such as the Academy on Camp Bowie, which houses the Applied Learning Center and the Newcomer’s Academy, or the Accelerated High School on Magnolia Avenue. Both were built on properties that were purchased for around $2 million in 1998, and both bus in students from across the district.

Why the district agreed to a deal that let go of 20 acres of prime land cheaply while paying almost $1 million for some depressed inner-city property that it can’t sell is a mystery that no one seems to be able or willing to answer.

Tocco, as is his custom, has not returned the Weekly’s calls. Former associate superintendent Ray resigned last year following revelations by the Weekly and the Star-Telegram that his department and a district concrete vender were being investigated by the FBI for alleged violations of state bidding laws. He could not be reached for comment. With the exception of Rangel, no board member has responded to phone calls or e-mail requests for comment.

Vail, who is circulating a petition seeking Tocco’s firing or demotion, said the deal, like the Motheral plant, is another example of “poor stewardship” of the taxpayers money. The most puzzling thing about the affairs of this district, he said, is the “conspiracy of silence” that seems to surround every questionable thing that Tocco or the board engages in.

But no matter who is responsible, the retired general said, “The buck stops at the superintendent’s desk.”

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