Katzenbach buyback scheme scrapped

From: Trenton Times, NJ - Mar 17, 2005

State officials have backed off plans to sell the Marie H. Katzenbach School for the Deaf in Ewing and buy it back over a 36-year period, state Treasurer John McCormac said yesterday.

"It's something that was considered and looked at seriously, but we have decided not to do that," he said, adding that the state will sell an unused part of the school's property instead.

McCormac's comments came after The Times reported yesterday that Ed Jenkins, director of the Treasury Department's division of property management and construction, had met last week with Katzenbach officials, parents, alumni and community members to explain the state's plan to sell the school and its 117-acre campus and lease it back.

The concept, known as a "lease-buyback" was designed to help balance the upcoming New Jersey budget that starts July 1 by selling $500 million worth of state property.

After considering the lease-buyback option, McCormac said he and other administration officials rejected the idea because of concerns it would be seen as illegal borrowing to balance the state budget.

Last year, the state Supreme Court ruled that borrowing to pay for state operations or to balance the budget violates the New Jersey Constitution.

At the Katzenbach meeting, Jenkins outlined a plan where a private entity would buy the school and renovate the facility, the state would lease it back and after 36 years the property would revert to state ownership.

"It's a win-win situation," Jenkins said at the meeting. "At the end of the day, the school gets partnership, the buildings revert back to the state and the state gets the money to fill the budget hole."

McCormac yesterday said Jenkins was unaware of the change in plans when he appeared at the Katzenbach meeting.

Though the lease-buyback is off the table, McCormac said the state still plans to renovate the school and will look to finance the project through the state Economic Development Authority or the state Building Authority, both of which have the ability to borrow money for development projects.

Officials from The College of New Jersey had expressed interest in a partnership with Katzenbach, but after looking at the cost of renovations on the campus that totaled an estimated $73 million, they said running the school would not be feasible without help from the state.

To help balance the budget, the state still plans to sell about 20 percent of the property on the eastern side of the campus that includes some fields and trees.

The property will be sold to either Ewing Township or a developer, officials said. It is unclear whether the elementary school and its playground will be knocked down as part of the plan.

Aware of the potential sale, Ewing officials voted last week to have the planning board consider changing the zoning at the school from residential to office park.

While parents and school officials at Katzenbach were relieved to hear yesterday that the lease-buyback scheme had been scrapped, they expressed concerns about part of the property being sold, particularly if it involves tearing down the elementary school and destroying trees.

"We're happy to hear that, for whatever reason, they changed their minds and took the property off the table," said Sharon DeVito, president of the Katzenbach Parent and Staff Education Foundation.

"We're still concerned with the other plans the state might have in mind for our children and the property," she said.

The Katzenbach property is just one of several pieces of land state officials are considering selling to help balance the budget.

Part of the Trenton Psychiatric Hospital property just across the border in Trenton probably will be sold, officials said, as will Ewing Residential and parts of the Jones Farm and possibly, though less likely, the Knights Farm, which were both preserved as farmland several years ago.

NOTE: Contact Mark Perkiss at mperkiss@njtimes.com or at (609) 943-5727.

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