Monday, June 16, 2008

My Schenley question

I asked this before, but with the continuing saga of Schenley High School ongoing I will try again because I don't hear anyone bringing this up. The debate is over whether it makes financial sense to remediate a known asbestos problem in the building. The thing is, this is all the wrong question.

Asbestos is asbestos whether the school building is used or not. Even if the decision is to raze the building, the cost to remediate the asbestos is still there. You don't just tear down a building laced with asbestos. You would have have to pay to go in and clear out the asbestos. I even wonder if the cost to remove all the asbestos pending demolition or reuse is higher than the cost just to repair in place the existing asbestos problem. We don't know because all that is talked about is the cost of dealing with the cost to fix the asbestos. But there should be no overlooking the fact that the cost of dealing with the asbestos is already accrued. The school district already owns that liability whether it wants to admit it or not and it is a liability that will have to be paid off someday. It is only a question of when that cost gets dealt with. A decision to close the high school is only deferring that cost.

So I understand the school district has a cash issue that is what may be forcing their hand with regards to what to do with Schenley in the immediate future. I understand that, but this gets to the real social accounting of this type of decision. Call it accrual policy vs. cash policy, but nonetheless its the way we collectively should be looking at most issues like this. Trying to deal with the immediate cash crises is as best short term politics. The bottom line is that the decision of what will eventually happen to the building is fundamental to the decision over whether it makes sense to close the building, but nobody is talking about that at all and nobody is talking about what it means to have such a large abandoned building right at the intersection of North Oakland and the Upper Hill. There is a real cost to that as well that is not being factored into any of this.

Put simply, the question that has to be asked and answered as part of this debate is what is the plan for the building if it is indeed must close.

Honestly, I am open to the idea that the school may need to be closed, but all that a hear thus far is a narrow discussion of how the school district can balance its near term budgets. I don't blame the school board or even the superintendent for that actually. It is a situation we all put them in by leaving school financing as narrowly based as it is in Pennsylvania. But in the end that does not justify ignoring the fundamental questions that need to be asked.


Anonymous John said...

You're assuming that the asbestos abatement cost is fixed and nontransferable. That is not necessarily the case. It is true that the school district is responsible for abatement if the building continues to be used for a school. BUT, if the school district transfers the building, it can transfer the building AND the asbestos liability to the new owner. While that will likely result in a lower price for the structure, it doesn't mean that the school district is stuck with a fixed cost now OR later.

Also, I don't see how it is the school district's responsibility to provide for the building's future. If it is such a valuable structure, then let some private developer come in a figure out an adequate re-use. The school district's job--as I see it--is to provide its students with the best possible education with the funds that it has. I don't think that it is--nor should it be--the job of the school district to redevelop properties no longer needed for its educational mission.

This debate reminds me of Woodland Hills, where we need to close schools due to declining enrollment. But some members of the community seem to believe that buildings should be kept open due to their alleged historical value or worries that their closing will create a "hole" in their neighborhoods.

I'm not saying that the question of the impact of closing schools on neighborhoods is easy or unimportant. But I just don't think that a school board is the place to debate it--especially when preservationists find it so easy to spend other people's tax money on buildings that could be better spent on the actual mission of school districts: education.

Monday, June 16, 2008 11:53:00 AM  
Blogger C. Briem said...

not really. That is saying the exact same thing that the liability of the asbestos ie being deferred until it gets capitialized into its transfer 'price'. It still means the liability is there until paid off by some means by the school district with the proceeds from a (hypothetical) sale of the property. So that shadow price may not be obvious in the price paid, but it will surely be there and be the school districts loss. No matter how it gets paid, the school district owns the liability already.. and the cost of that liability may be a lot higher for a redevelopment vs continued use of the structure as is.

A private developer is surely going to take that into account if they were to redevelop. It's probably a tough parcel to redevelop, location wise, parcel shape and the extant structure all make it more difficult than most other big redevelopments being planned.. and I have to believe there is some saturation in that type of redevelopment market right now anyway. The hope I hear is that Pitt or someone would buy the property, or at least take it off their hands, but if that is really more than a hope I would want to see some more facts on the table.

Monday, June 16, 2008 12:14:00 PM  
Anonymous John said...

Okay, Mr. Economist. But, even though I recognize that "in the long-run we're all dead," I disagree. My point was that, if the building remains a school, my understanding is that asbestos abatement has to be performed NOW--seriously, the school district can't wait any longer without fines (and/or worse) beginning to accrue. Such abatement costs would come from the present budget. If the students are shifted elsewhere and the building shut down, the school district avoids the immediate cost of abatement and defers its "cost" until later. And, I would argue, that "cost" from the perspective of the school district would be minimal because the school district is essentially abandoning the building. In fact, I expect that the school district would likely be willing to part with the building for minimal value.

I don't disagree that you raise a good point worthy of debate. But I don't think that the school district is the proper entity to debate or bear this particular burden. The school board should be focused on how best to spend taxpayer money so as to provide students with a high quality education.

Given the overcapacity of buildings within many of Pittsburgh's public school districts, it just doesn't make sense to me to spend millions of dollars to abate asbestos in a building that is no longer needed. It would be akin to United Air Lines spending millions of dollars to upgrade a gas-guzzling Boeing 747 when it could carry about the same number of passengers on a modern, fuel efficient 777 that is already in its fleet.

Monday, June 16, 2008 1:34:00 PM  
Blogger Bram Reichbaum said...

I would imagine that the cost of asbestos remediation / removal may be transfered, of course, to private concerns after the closure of the school.

And I have an open mind and can see how that might be a good thing, as part of the right bargain.

But I'd like to know what is happening. Always there is this sense that we must Move Forward into a future that has never been forthrightly discussed and voted upon.

Monday, June 16, 2008 4:58:00 PM  
Blogger Bram Reichbaum said...

This comment has been removed by the author.

Monday, June 16, 2008 4:59:00 PM  
Anonymous Anonymous said...

I've heard second-hand that Pitt's been wanting that building for years. I can certainly see how they would. I mean, it's already a school building, so if they just fixed it up and got rid of the asbestos, it would be a good location for them.

With that said, I am annoyed that the school district hasn't listened to the many people speaking out on this subject. Quite a few have said that they would be happy to work on raising private funds for this. I myself would certainly donate a little money to help keep my old school stay open. It should at least be considered. They can still close the school for the time being, and reopen it later if possible.

The thing about Schenley is that it's really a good school, as public schools go. There is something intangible going on there, some magic recipe. Maybe it's the mix of programs offered there, or the mix of ethnicities and socio-economics in the student body. Maybe its the location. I don't know. But I'd love to see it stay open.

Tuesday, June 17, 2008 4:42:00 PM  
Blogger C. Briem said...

For the record, I have no knowledge of Pitt's perspective on that at all. I would guess that discussions on that certainly have taken place over the years, but if there was anything substantive on the table I bet it would have been made part of the current debate. It really isn't a 'school building' in the way Pitt could use. If they did want it, I would bet it would be more for research space, but that is just a guess. Also, I hear Pitt drove a hard bargain for the University Club building and didn’t pay anywhere near what it’s asking price. Pitt would be a good bet as to where the building eventually winds up, but it would not be an easy sell

Wednesday, June 18, 2008 7:21:00 AM  

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