This KY school district sold 3 buildings for $61,000. They were valued at $1 million.

The old Osborne Elementary School in Bevinsville was appraised at $775,000, but sold for just $50,000.
The old Osborne Elementary School in Bevinsville was appraised at $775,000, but sold for just $50,000.

The Floyd County school district approved the sales recently of three buildings appraised at more than $1 million for just over $61,000, despite receiving bids previously that totaled more than $113,000.

District officials said the low bids were the result of a poor economy in Floyd County and Eastern Kentucky, and that the district was better off selling the buildings below the appraised values because of liability concerns and the cost of insurance.

One of the buildings, which was previously bid on by a property management firm for $8,100, went in the second round of bidding for $6,200 to Jeff Stumbo, a former school board chairman in Floyd County, according to district records. The building had an appraised value of $180,000 in March 2017, according to school district records.

The Kentucky Department of Education, which evaluates the sales of surplus properties for school districts, approved the sales Friday.

“Unfortunately in Eastern Kentucky, surplus school buildings don’t have a lot of value,” said Donna Duncan, director of the education department’s Division of District Support. “I’m sure they wanted to get the top dollar they could.”

Floyd County Schools declared the three buildings — an old maintenance building and two closed elementary schools — surplus properties late last year.

Soon afterward, the district advertised their intention to sell the buildings in the Floyd County Chronicle and Times, and received bids that totaled about $113,000.

Sherry Robinson, the district’s board of education chairwoman, said then-Interim Superintendent Stephen Trimble recommended that the board not accept those bids because he felt the Department of Education would not approve them.

In a letter to state education officials, Trimble said the board rejected the bids because they did not meet their appraised values, and asked officials for guidance on how to move forward.

In April, the board voted to again post the buildings for sale and, in June, approved the bids totaling $61,000.

“They were lower than what I expected, but it is a product of our economy,” Robinson said. “Of course, it’s not ideal.”

On Friday, The Lexington School, which is private, will break ground on a $10 million project that will include the expansion of a separate program for students with the reading-related learning disability dyslexia.

Robinson said the district has had problems with people looting the buildings, and officials were concerned about liability issues if someone were to be hurt on the property.

Floyd County Schools Superintendent Danny Adkins also said the district had problems with criminal activity, including one instance where an individual was allegedly using one of the properties as a space to cook methamphetamine.

The district was also stuck with insurance premiums totaling more than $150,000 for the buildings, Adkins said.

The price on the old maintenance building, which has been vacant since last year, increased between the two bidding sessions, from $5,050 to $5,100. Both bids came from Floyd County resident John Campbell. The building was appraised in March 2017 at a value of $128,000.

Campbell said he hopes to use the building as a storage facility for personal belongings. Over the years, Campbell said he has seen property values drop dramatically in Floyd County as the coal industry faded and the economy faltered.

His own home has dropped about $60,000 in value since he bought it about eight years ago, Campbell said, and he’s sold properties along U.S. Route 23 — a major thoroughfare in Eastern Kentucky — for a third of their appraised values.

“There’s just no money in this area,” he said.

The sale price for the second building, the old Osborne Elementary, dropped from $100,000 to $50,000. It has been vacant since last year. The price of the third building, the old Allen Elementary, dropped from $8,100 to $6,200. It has been vacant since 2010.

Danny Meade, who made the $50,000 bid for Osborne Elementary, said whoever appraised the building at $775,000 “must be living in another world.”

The old Osborne Elementary School in Bevinsville was appraised at $775,000, but sold for just $50,000. Will Wright

Meade said he may invest in the property, with hopes of opening an assisted living home or some other business. He acknowledged “it’s going to be hard to put any kind of business in there” because of the building’s rural location.

“Nobody got cheated on this deal, I promise you that,” Meade said.

A private firm, J&S Property Management, made the first bid on Allen Elementary, but the approved bid went to former Floyd County Board of Education chairman Jeff Stumbo.

Robinson said Stumbo, despite being a former board of education chairman, was not given any special treatment during the bidding process. Stumbo was the only person who made a bid on the building during the second round, according to district records.

Stumbo said bids often come in low for surplus school properties because the bidders do not know the true condition of the building or what types of repairs may be needed.

“You don’t know what you’re getting into,” he said. “When they’re abandoned buildings … some of them have a lot of issues.”

Stumbo said he hopes to somehow use the building to serve the community, possibly by creating a center for veterans. He also said he received no special treatment because of his former place on the school board.

“Everyone in Floyd County or anywhere else had the same opportunity to bid on this property that I had,” Stumbo said. “I didn’t throw a bid out there to make any money on it.”

Duncan, with the education department, said that if Stumbo’s bid had been drastically lower than the first bid, or if other bids had been received, his position as a former school board member would have been more concerning.

“It was such a low bid the first time around, too,” Duncan said. “I don’t think there was any kind of maliciousness there.”

The district also is in the process of transferring ownership of another surplus building, the old McDowell Elementary, to the county for use as a community center.

Robinson said the county will pursue grants to get the building ready for use by the community.

“They don’t really have anything ... to use as a community center,” Robinson said. “It would be beneficial for the community.”

Will Wright is a corps member with Report for America, an initiative of The GroundTruth Project. Reach him at 859-270-9760, @HLWright