OEDEL: Miraculous returns

March 9, 2014 

First miraculous return: Dr. Romain Dallemand, former Bibb County School superintendent, has apparently now fled back to his Haiti birthplace. After leaving Bibb’s school system under a cloud last year, Dallemand had, at least until recently, served as board chairman of School District Reform Collaborative. Dallemand’s collaborative offered, among other things, financial audits to school systems. Its now-nonresponsive website still notes, “School districts officials (sic) are required to be effective stewards of the community’s resources.” That website goes on to imply that wayward officials can get financially frisky, and that the collaborative knows what due diligence is needed to stop it. How ironically true. Dallemand seems genuinely expert.

Dallemand will have a hard time providing auditing services from Haiti, though. The special prosecutor Bibb County District Attorney David Cooke called for last Monday will have an equally hard time quizzing Dallemand about his stewardship of over $40 million in tax dollars spent on initially unauthorized or never-authorized technology purchases and various other initially unauthorized commitments associated with the Bibb County Board of Education’s truly eye-popping lease for part of 1780 Anthony Road. However, if Dallemand is charged with crimes involving embezzlement by public officers, he may be extradited under a 1905 Haiti-U.S. treaty.

And then there’s the second category of miraculous returns: possible financial returns to the landlord of the old Ballard-Hudson school at 1780 Anthony Road.

Cliffard Whitby told me that he, with a few others he declined to name, put up personal funds to buy that building from Bibb’s BOE in 2009 for $220,000 in the name of a new nonprofit Whitby organized, Central Georgia Partnership for Individual and Community Development.

Whitby’s claimed purpose? Solely to help his community. Whitby grew up nearby and graduated from Southwest High before beginning work in construction, property management and development. Whitby says he personally hasn’t gotten a dime back from the transactions with Bibb County and the bond deal. He also says he’s put in slightly under $1 million more in contracting services through Whitby Inc., getting nothing back for that either.

But those donations (loans?) must feel largely wasted in terms of community service. The portion of that building being leased back to Bibb’s BOE is still eerily empty, half finished. Construction has largely stopped.

Another third of the total square-footage, including the most costly and valuable part of the property -- a spiffy basketball arena paid for partly with CGPICD bond proceeds secured by BOE payments -- is being leased not by Bibb’s BOE, but Central Georgia Technical College, for $11,000 monthly with a 2 to 3 percent automatic annual increase. That’s roughly $144,000 average annually over the lease’s life. By contrast, for BOE’s two-thirds, only about half of which is finished space, the BOE is now paying CGPICD $575,000 annually plus another $325,000 per year. The BOE also amazingly kicked in another cool million for renovation. Total, that’s $10 million the BOE would pay over a decade.

The two leases are grossly incommensurate with one another despite the fact that total construction costs have been allocated about equally between the two leaseholds, according to Whitby.

Whitby’s CGPICD is now trying to peddle the whole building back to Bibb’s BOE for $7.8 million, which Whitby says is CGPICD’s sunk cost. Whitby declined to say who else had done work other than Whitby Inc. and Stafford Construction. Stafford did most of the renovation work, charging about $3.8 million for apparently high-quality construction, especially CGTC’s high-finish arena including an addition.

The BOE appears duly skeptical about CGPICD’s offer. As former Bibb and present DeKalb County Chief Appraiser Calvin Hicks explained to me, discounted cash flow, not cost, is better for valuing such buildings in problematic locations. Some evidence of cash flow would be the $144,000 being paid by CGTC, but CGTC didn’t pay for the arena build-out, so even that’s high compared with BOE’s outrageous lease. BOE’s “special” purchase option at the end of 10 years isn’t any bargain either, because the BOE would be paying yet again for its own improvements.

The BOE needs independent counsel to evaluate whether it may legally declare the lease with CGPICD void.

David Oedel teaches at Mercer University law school.

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