Millions More Wasted in Detroit Schools: Real Estate Edition

Via Education Week:

Detroit Public Schools overspent millions of dollars in taxpayer money because it botched real estate deals that involved too many agents and inflated property values, according to the findings of an investigation by the district’s inspector general.

Here are some of the eye-popping deals:

  • Bought five floors of the Fisher Building in downtown Detroit in 2002 for the new district headquarters for $24.1 million from a company that in 2001 paid $21.7 million for the whole building.
  • Paid $5.6 million for properties for the new Cass Tech and Detroit School of Arts in 2001 and 2002 when the city had appraised the land at $812,800.
  • Spent $11.9 million for a property in March 2003 that less than two years earlier was sold for $1.3 million.
  • In one deal, two parcels valued at about $57,000 were bought by Detroit Property Acquisition for $550,000 and sold immediately to ISI for $701,500. DPS’ final purchase price on the same day: $743,000.

This huge amount of waste occurred under the state’s watch. This happened after the state took over the Detroit school district. Just another indication that a state takeover of schools in financial and academic distress is no guarantee of any future financial or academic improvement for those schools.