A tale of two districts: Bentonville, Austin tackle teacher housing goal in different ways

Bentonville donating land; Austin leasing it

The Bentonville School Board approved a proposal in November to donate land just east of Bentonville High School to build affordable housing for teachers and staff members. This rendering shows how that housing development could look and its position relative to the high school.
(COURTESY OF BUF STUDIO/EXCELLERATE FOUNDATION)
The Bentonville School Board approved a proposal in November to donate land just east of Bentonville High School to build affordable housing for teachers and staff members. This rendering shows how that housing development could look and its position relative to the high school. (COURTESY OF BUF STUDIO/EXCELLERATE FOUNDATION)

BENTONVILLE -- Two school districts -- one in Arkansas, the other in Texas -- want to provide affordable housing for teachers and are taking different paths to do so.

The Bentonville School Board last month voted 5-1, with one abstention, to donate School District land to the nonprofit Excellerate Foundation to build housing for teachers and staff members.

"To our knowledge, in contemporary times, I'm not aware that it has been done before" in Arkansas, Superintendent Debbie Jones said after the Nov. 14 vote. "I think that we're very fortunate that we have this opportunity. We're fortunate that we have the Excellerate Foundation."

The Bentonville plan involves about 9 acres and 100 units, with rental and ownership options.

On Nov. 16, the Austin (Texas) Independent School District board voted unanimously for an agreement with developer NRP Group to build 500-plus rental units of workforce housing on about 18 acres of district land.

Aside from the amount of property, number of units and owning vs. renting, a key difference is Bentonville is donating its land while Austin is leasing the land.

And in other ways, Bentonville and Austin isn't an apples-to-apples comparison. The Bentonville district had an enrollment of 19,137 as of Oct. 1, while Austin's enrollment is more than 70,000, according to the district's website.

"We did consider multiple options, but the district didn't contribute any funds other than the land donation, and Excellerate will finance the project," Jones said about deciding to donate the land. "As you look at other models, investigate the amount of money invested by the districts."

Bentonville's project is estimated to cost $25 million, Excellerate President and CEO Jeff Webster said, with no money coming from the district.

WHY LEASING WORKS FOR AUSTIN

Once land is sold or donated, assume you're not getting it back, said Jeremy Striffler, the Austin district's director of real estate.

"There'll be a useful life for the housing," Striffler said. "But we don't anticipate what we're going to build is going to be up here for eternity. So we believe, as a strategy, it behooves us to maintain ownership of the land. Who knows 70 years from now what the situation will be?"

There might be a time when the district wants to regain control of the site, and a ground lease keeps that option open, Striffler said.

The district didn't sell the property because it would rather receive annual income than a one-time check, he said.

"Austin's not in the position right now where we could just donate the land," Striffler said. "We have some funding challenges. Even though our goal is not necessarily to solve any of our funding challenges with this site, it just will be nice to have a recurring funding stream."

It's yet to be determined how much NRP will pay the district in the lease, Striffler said. NRP, established in 1994 with headquarters in Cleveland, has 15 offices nationwide, including in Austin, according to its website.

Striffler said deed restrictions can be added to property development agreements. But when do those restrictions expire and would they hold up in court against a legal challenge, he asked.

Austin had 14 proposals for the project, Striffler said.

Specifics about myriad details -- including the number and sizes of units, design and income levels, because some units will be income restricted -- now must be determined, he said. NRP will do a floodplain study, secure permits and address zoning requirements, Striffler said.

The project costs the district nothing, he said.

"The developer will be responsible for all the costs related to constructing the housing," Striffler said. "They will be the one maintaining the housing and operating it."

Construction could start as early as the summer of 2025, he said. In addition to the housing, a new education building will go up as part of the phased-in project, he said.

"It's going to take probably over four years to get everything done," Striffler said. "Some of this stuff will be done sooner than later. We're probably looking at 2028, maybe into 2029, when the site is stable -- all the housing is open, the school building is open, all the amenities are in place, etc."

It might take two years from the groundbreaking until the district starts opening some of the doors on the housing and the school building, he said.

OWNERSHIP BENEFITS IN BENTONVILLE

For the Bentonville-Excellerate partnership, donating the land was the "easiest and fastest way to proceed," Webster said Monday.

"It keeps costs down and also makes it easier for the financing when one part has control of both the land and the units versus a lease," Webster said.

He emphasized the importance of the home-ownership piece of Bentonville's project, saying it was "way more beneficial to the teachers" than anything he'd seen nationally.

"It gets them on the equity-build cycle for home ownership," School Board President Kelly Carlson said before the Nov. 14 vote. "It's an encouraging place to live because there'll be other teachers there in a community."

Here's the housing breakdown, according to Webster:

Section 1: Multifamily, 50 to 60 rental units, two- and three-bedroom. Because of federal and state funding sources for this part of the proposal, these units can't exclusively be for School District employees.

Section 2: Single-family rental, 20 rental units, one- and two-bedroom.

Section 3: Single-family homes, 20 homes for teachers, one- and two-bedroom, with prices ranging from $180,000 to $200,000. Webster described them as starter homes, 850 to 1,000 square feet.

For section 1, there'll be a public waiting list, but the district can exert influence by ensuring district employees are aware of the opportunity, Webster said.

The School District controls who lives in sections 2 and 3, Webster said. Of the 100 total units in the plan, 40 will be controlled by the district as far as residency and other requirements.

"We have some level of control for an unused piece of land," Carlson said.

Carlson said the district previously determined it wouldn't use the property. Only about 5 to 5½ of the 9 acres can be developed because the rest of the area is in a floodplain, Webster has said.

The land's value is estimated at $1.3 million to $1.5 million, based on three broker opinions, according to the district.

"It's not a number that moves the needle for a district our size," said Jeremy Farmer, a board member. "If that number was $20 million, we could do something with it that would move the needle in our district."

When it comes to land for additional schools, the district has 300 buildable acres elsewhere to use, Carlson said.

Hammering out the project agreement between the district and Excellerate is the next step, Jones said.

Board member Tatum Aicklen accepted an appointment by Carlson to work with Jones, the administration and Excellerate to finalize the details. Webster said the goal is to have the deal finished by the end of the year.

Of the 40 units under district control, the plan lists 20 as rental and 20 as homes to be owned. But that split is flexible, Webster said. For example, it could be 30 ownership and 10 rental, depending on what the district wants.