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Something Stinks

Something Stinks Part II

What A Deal

School property on block?

Loudon board mulls options on real estate

LENOIR CITY - A controversial piece of property on Highway 321 in Lenoir City that was purchased by the Loudon County School Department could be going back on the block.

The school board, facing a budget shortage and an underfunded building program, discussed selling the property at a workshop Thursday night. Chuck Cagle, attorney for the school system, presented a letter to the board on how the property could be sold.

The 80-acre parcel was purchased for about $2.3 million in September 2006. At the time, the land was to be used for a new school. Members of the school board later questioned the need for the land and the cost.

Knoxville attorney and developer Richard Eisenbach, who had a previous option to purchase the property, paid $1.3 million for 103 acres just one day before selling 80 acres to the school department and retaining 20 acres of highway frontage.

In 2008, the school board authorized Loudon County District Attorney Russell Johnson to ask the Tennessee Bureau of Investigation to investigate the transaction. Johnson declined to investigate, citing other priorities, but did provide his own analysis of the deal in a letter to schools director Wayne Honeycutt.

The land was purchased when commercial real estate prices were peaking after considerable search by officials in the school department, Johnson said. In the aftermath of the real estate boom, the price paid for the land might seem excessive, but there was no obvious conflict of interest or wrongdoing to investigate, he said.

At the workshop, board member Van Shaver suggested that the property be put on the market for $2.5 million. The land is zoned commercial and industrial and is not suited by grading or location for a school site, Shaver said.

Other board members expressed caution about trying to sell the land in the current real estate market. Suggestions included trying to trade the land some time in the future for a tract more suitable for building a school. School board members can't vote on selling the land until their regular meeting later this month.

Lenoir City real estate agent Marci Nichols offered her own assessment of the land.

"It's prime real estate," she said.

Because of its location on Highway 321 near Interstates 40 and 75, the land will always be highly desirable for commercial use, Nichols said. Even in the current market the school board could probably sell the land at a profit, she noted.

"They might make a little bit," she said.

The long-term picture is even brighter. The property is an excellent investment for the future, especially as the overall economy improves, Nichols said.