Wayne Board of Education Has Not Sold the Schinman Property...Yet

WAYNE, NJ – During the July 2024 school board meeting, the Wayne Board of Education approved the agreement to sell a 9.85-acre tract of land running along Valley Road for an even $1million. However, the “sale” is in attorney review and there is a six-month due diligence period where the potential buyers can withdraw their offer if their engineering study does not determine enough “buildable area” in the wooded, wet area of land.

The Shcinman Tract is 9.85 acres and located on the west side of Valley Road - as you're heading south toward French Hill Road, it’s on your right, past Judith Place.

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It was purchased by the Wayne Board of Ed in 1971 using funds from a $300,000 referendum. The idea was to use the land to build another school, but that never happened.

Now, after years of holding on and paying to maintain the sidewalk along the edge of the property on Valley Road and, at one point, offering the property to the township to purchase using taxes collected for open space - the school board finally decided to sell the unused, undeveloped land. It was put out for bid to local developers by the school administration, but no one offered a bid. This authorized the school board to hire a realtor and “sell it to any interested party.”

A group of three people - Bharat N. Kanani, Jenish B. Kanani and Akash K. Sheladia - made an offer of $1,000,000 to purchase the land, and the school board accepted the offer.

But here’s where it gets sticky.

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“The contract is nothing more than an offer, and it’s not out of attorney review yet,” said Gene Lowe, a realtor from Wayne’s Howard Hanna/Rand Realty that was contracted by the BOE to list the property. “There’s not a deposit down or anything.”

The agreement is contingent upon the potential buyers’ results of an engineering review of the property.

School board attorney John Geppert said that the buyers can walk away from the deal if their engineers determine that they cannot “subdivide” the property. If they can, and there is enough buildable land for their plans, then the sale will likely go through. If not, it will likely fall through.

“So, we're really at the beginning stages of this,” said Geppert. “But the good news is that there is a potential buyer who is going to take the steps to try to develop the property and hopefully it will eventually result in $1 million for the school district.”

Is the $1 million offer fair?

Recently, Colene Smith of Weichert Realtors in Wayne arranged a buyer for a 14-acre tract of land on the Hamburg Turnpike. The asking price was $2.7 million, and Smith alluded that the offer was near that asking price. The selling price would then work out to about $190,000 per acre.

The Schinman tract, should this deal go through, would be sold for about $100,000 per acre.

Tax assessment records show the property assessed at $1,004,900, and generally, properties have a real market value much higher than the assessed value – particularly in Wayne where there hasn’t been a revaluation in about 20 years. Currently, the ratio between assessed value and approximate market value used in Wayne is 37.91%, and if this held true in the case of the Schinman Tract, its market value would be about $2.6 million.

But that doesn’t hold true, and here’s why…

“The value of any property is what someone is willing to pay for it,” said Lou Batelli, owner of Century 21 Gemini in Wayne, who has 40 years of experience in commercial and residential real estate. “In Wayne, we’re dealing with flood zone areas, we’re dealing with areas that are generally just wet. A tract of land on the hills' side of town is generally going to be more desirable compared to the valley side.”

The value of undeveloped land depends mostly on how much land is actually developable, according to Batelli.

A brook runs through the Schinman Tract along Valley Road which takes away acreage of the land under the brook. Plus, township engineering and state DEP regulations will take away a buffer zone on both sides of the brook. “Then you have your setback line, said Batelli. “So, they may be losing two to three acres because of that brook.”

There are a lot of unknowns with this property, which is why engineers will soon be out there examining the land and providing their opinions to the potential buyers on how much of it can be developed given environmental factors.

The area is currently zoned for residential housing, and BOE President Don Pavlak believes nothing more than just a few houses may end up on that land, likely connected to Stagg Road. He explained that an independent appraiser was hired by the BOE, and they determined that the Schinman Tract’s appraised value was $950,000.

It’s a rare thing to have a tax assessed at the market value, especially because there hasn’t been a revaluation in some time.

When asked if he felt the offer was fair, Batelli could only say, “I don’t know enough details, but I would find it hard to believe that the Board of Education took a discount and would leave, like $500,000 on the table. I’m sure they have a good firm of attorneys that have done their diligence and are protecting the interests of the Board of Ed and us, as tax-paying residents.”

When the news of the agreement was first made public, a reporter said that the tract had been “quietly sold,” which Pavlak said was “just not true.”

“This discussion has been going on for a number of years - probably 6 to 10 years,” he said. “We’ve had meetings where we had the engineers and the architects in, and they've all spoken about this. The board collaborated after getting all that information - and this was all at public meetings. So, to say that this was sold quietly is not accurate.”

It will be several months before we learn if this offer actually turns into a sale, and when that news breaks one way or the other, TAPinto will share it with you.

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