Real Estate Amateur Hour

Here are the facts regarding the $1 a year Columbus Avenue Lease shown in the documents obtained under the Freedom of Information Law:

1. The Valhalla School district is leasing the entire Columbus Avenue School Property to Easter Seals of NY for $1 a year.

2. The $1 a year lease was prepared by a school attorney at the direction of Tom Kelly and Brian Wolfson, who offered it to Easter Seals five months before the school board voted to "enter in to negotiations" on leasing the school.

3. Dr. Kelly even applied, with his tenant, Easter Seals, to the New York State Office of Children and Family Services for a day care license before the board voted to enter into negotiations on a lease.

4. It is a ten year lease, with a ten year option. There is no provision increasing the $1 a year rent over twenty years

5. Valhalla pays for maintenance and utilities on the building. The $90,000 annual payment which the district claims as rent is a reimbursement for utilities, snow removal and maintenance that any other tenant would pay in addition to market rent and it is all that Easter Seals pays. The district also claims that Easter Seals was planning to renovate the playground for community use. Take a walk to the playground. The fence is in disrepair and coming apart. Sections of the top rail are disconnected and present a dangerous condition. Several of the swings are are broken and have not been replaced and a whole section of the old playground is mission. Easter Seals in in the third year of it's lease. It has cost the taxpayer over $1 million dollars to keep the school since it closed and Easter Seals can not even keep the swing set in tact.

6. The superintendent’s claim that Easter Seals paid $500,000 for "improvements" to Columbus Avenue, is completely undocumented. The lease requires Easter Seals to provide such documentation to the school district and the New York State office of Children and Family services must review and approve such improvements. Neither the district nor the Office of Children and Family services has any proposal, permit, invoice or correspondence evidencing any major capital improvements.

7. The school district has a continuing bond payment of $300,000 for work done on the Columbus Avenue School in 1991. The district pays $300,000 out of funds meant for children’s education to pay the bond so that Easter Seals can rent the building for $1.

8. According to the district's Voyages newsletter, only 24 Valhalla students use the after school program offered by Easter Seals exclusively for Valhalla residents.

9. To secure board approval of the $1 a year lease, school board members were told that if the district received market rent, the district would have to pay School, Town and County real estate taxes on the property. The truth is school districts are never subject to paying real estate taxes.

School Districts are government agencies organized to operate under the laws of the State of New York. Employees of the school district and even boards of education are not permitted to use tax dollars to subsidize privately run, un-mandated pre-school and after-school programs. By ignoring state law requiring districts to lease property belonging to the taxpayers at market rent, the board of education is effectively subsidizing Easter Seals, a Park Ave corporation, and its clients. Should school tax dollars subsidize similar programs at Holy Name of Jesus and the Methodist Church? After all, these benefit working mothers, too.

The resources of the school district must be directed to the education of the children of the district who are of age and only as prescribed by law. This matter has been brought to the attention of the New York State Comptroller's Department and after completion of their audit, the board should sell the property, applying all proceeds to outstanding debt of the district.

We continue to press the state comptrollers office to do a full audit on this district that has been illegally and fraudualently run since 1998. Please feel free to contact Jack Dougherty at the state comptroller's office and let him know you want an audit JDOUGHERTY@osc.state.ny.us