This story was updated at 9:16 p.m. on Monday, June 15, 2020, with more information.
The Hamilton County school board is set to vote Thursday on possibly purchasing the former Sears store at Northgate Mall in Hixson, moving one step closer to Chattanooga School for the Liberal Arts' dream for a new building.
Sears isn't the only property that the district is eyeing at Northgate — it is also considering purchasing the 173,000-square-foot former J.C.Penney store at the mall.
The board is expected to vote on two letters of intent Thursday to buy the Sears parcel for $6.5 million and the J.C.Penney parcel for $2.4 million, but not all nine board members were happy with the proposal presented to them during a board meeting Monday night.
Chattanooga developer Bassam Issa, in a joint venture with John Woods, the chief executive officer at asset manager Southport Capital, purchased the Sears store after news broke in April that the district was eyeing the 15-acre tract — Issa, as part of a development group, already bought the vacant J.C. Penney store from the Simon Group in 2019.
Issa has unsuccessfully attempted to get school board members and Hamilton County commissioners to approve a long-term lease agreement for the properties, according to district officials, and now the district is trying to settle on a price.
Board member Steve Highlander questioned the proposed price, which is almost double the $3.5 to 4 million that district officials initially estimated the Sears property would cost taxpayers.
"You realize this is double what [Issa] paid for it?" Highlander asked the district's Chief Operations Officer Justin Robertson. "I don't mind people making a profit, but I don't think they should make it off of county agencies."
Board members Rhonda Thurman, of District 1, and Jenny Hill, of District 6, were also critical of the proposed price.
"I think Dr. Highlander has an important point about the responsibility that all of us have to each other. ... That counts for me as a private business owner as much as it counts for the Hamilton County Department of Education as a government entity," Hill said. "I'm frustrated for a $6.5 million price on a building that we thought we were going to get for $3.5 or 4 [million]. ... I do not intend to sit on this board and let the taxpayer get fleeced."
Letters of intent to purchase former Sears, J.C. Penney stores at Northgate MallView
Transforming the Sears property to hold a 165,000-square-foot school building, a gymnasium, soccer field and three playgrounds is part of "Phase Zero," or the first steps of a potential 10-year facilities plan recommended by MGT Consulting Group to the Hamilton County school board in March.
CSLA has been promised a new home for more than two decades. The 71-year-old building is prone to water leaks, sits on a shifting foundation, is riddled with windows that don't seal and isn't accessible to people with disabilities — but the school's students and teachers remained at its dilapidated East Brainerd location until the coronavirus sent them home this spring.
The school would be expanded to a K-12 program at the new site, and the J.C.Penney store could become the future home of a combined Alpine Crest/DuPont/Rivermont elementary school, as recommended in "Phase One" of the facilities plan.
District 3 board member Joe Smith represents Hixson, and though he's favorable of the idea of using the J.C. Penney site for a much-needed new elementary school, he's apprehensive of adding the upper grades to CSLA's program.
"There's a lot to be said for that piece, taking those elementary schools and combining them into one school ... that's something, we really need to take a look at," Smith said. "But I just question, do we really need another high school at this time?"
County Commissioner Tim Boyd, a staunch supporter of CSLA — which he represents — also spoke favorably of the idea, but doesn't think the district needs the additional $9 million district officials say would be needed to complete the $34 million project on the Sears site.
In 2017, the county commission allocated $27-28 million toward a project merging Tyner Middle and High academies into one building and moving CSLA into the former middle school as part of $110 million in capital building projects, but the plan was halted when the district contracted MGT to conduct a districtwide audit of school facilities.
About $26 million of the funding remains, but initial renderings and estimates project the cost to renovate Sears in time for the 2021-22 school year would cost the district $34 million — and still leave Tyner in its own aging, failing facilities.
"If the Sears [and] J.C. Penney's option is a reasonable one, I'm certainly open to the idea. ... If the property at Northgate is a reasonable option and we can assure ourselves that we aren't getting crazy with the design or re-purposing of the building, I've got to say I'm for it," Boyd said. "The additional $9 million would be a point of contention with me. ...I would want to sit down and see if there could be some value engineering, that we aren't overbuilding."
The letters of intent to purchase either the Sears or J.C.Penney property were added Thursday's meeting agenda on Monday, three days after the agenda is typically released to the public.
The board will still have to approve the final purchase of the properties even after approving letters of intent, according to district officials.
Contact Meghan Mangrum at firstname.lastname@example.org or 423-757-6592. Follow her on Twitter @memangrum.