RALEIGH – Members of Wake County’s new school board majority say they’ll take a sounder approach to real estate and school construction in light of past accusations of overpriced, suspect deals.

“We have to take a very careful, good look at the present real estate department. I don’t have any confidence in it myself because of past performance,” said school board member Ron Margiotta, a frequent critic of the school system’s land buys.

The school system’s real estate division is taxed with finding suitable sites around the county for new construction. The school board has final veto power on any purchase, but it first must get approval from county commissioners.

That’s caused strife in the past because commissioners have objected frequently to land purchases, saying the school board wanted to pay too much. The commission now requires the board to get independent appraisals before it buys property.

Other members of the school board’s new majority, elected in October and November on a platform of broader school choice and fiscal conservatism, agree that changes need to be made.

Margiotta and his allies sparred with the rest of the board last month over a proposed site for a new high school in northeast Wake County, signing a letter dated Nov. 4 that urged a delay in the project until other options could be vetted.

The board voted Dec. 1 to stop immediately all work and expenditures on the site.

“We’re in the education business,” said Chris Malone, who represents northeast Wake County. “We’re spending way too much time arguing over a piece of ground.”

Buy high, sell low

School board members took heat in 2007 when they tried to buy land for a new middle school in Rolesville, a town northeast of Raleigh, for $75,000 an acre. Appraisals estimated the property’s worth at $48,000 and $63,000 an acre, respectively.

After initially rejecting the higher price, county commissioners consented in April 2008 to pay the greater of those two amounts after Rolesville leaders said they would chip in about $3,000 an acre.

In two other instances, the school board agreed to sell land at an apparent deep discount and purchase land at a steep markup.

In 2007, the school board voted 6-2 to sell 9.4 acres of surplus land in Wendell to an adjacent church. A recent tax revaluation puts the value of the property at nearly $600,000, but the school system sold it for one-fourth that amount.

A reverse deal cropped up the same year when commissioners bought land near downtown Apex for 30 percent higher than a developer had purchased it for the day before, reported the News & Observer of Raleigh.

Apex Olive mixup

One deal that drew a chorus of criticism was for an 108-acre tract of land south of Apex. The school board agreed to pay $8.7 million for the property that two appraisals later valued at half that amount. The property’s tax value is nearly $4 million, according to a revaluation.

County commissioners torpedoed the deal after learning that a real-estate investment company, Apex Olive LLC, had bought the land 10 months prior for nearly three times less than the price agreed to by the Wake County school board.

Accusations of a conflict of interest also arose after it was revealed that Jim Goodnight, a software billionaire from Cary, is a partner in the investment company.

In 2006, Goodnight and his wife, Ann, backed a $970 million bond for school construction, which voters approved. The funds might have been used to pay Apex Olive for the land.

In a telephone interview, Apex Mayor Keith Weatherly described the relationship between the investment company and the school board as “totally, totally weird.”

“They were willing to pay top dollar for land that no one else was willing to buy,” Weatherly said.

Changes in store

School board member John Tedesco, who represents southeast Wake County, said the new majority would work better with county officials on land deals.

“I see us being much more open to working with our municipal leaders and county commissioners, and working even closer to develop mutual goals for our agenda,” Tedesco said.

He acknowledged that the previous school board likely overpaid for land. “I know there has been skepticism in the past,” he said.

Malone said he would consider surrendering real estate decisions to the county commissioners, and that the school board would follow a “good, basic conservative philosophy” in the interim.

“We’re going to be very smart with our cash — nothing along the lines of double the appraised price for a piece of property,” he said. “We’re going to look for good deals.”

David N. Bass is an associate editor of Carolina Journal.