Seattle Public Schools followed state law and district policy when the School Board voted last year to sell the former Martin Luther King Elementary School to the lowest bidder, First African Methodist Episcopal Church, the state auditor has found.

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Seattle Public Schools followed state law and district policy when the School Board voted last year to sell the former Martin Luther King Elementary School to the lowest bidder, First African Methodist Episcopal Church, the state auditor has found.

In a lengthy report issued Monday on the controversial deal, State Auditor Brian Sonntag also found that the district obtained a valid market-value appraisal of the property.

The audit, sparked by citizen complaints to a hotline, also found no evidence the district’s former executive facilities manager, Fred Stephens, an influential First AME congregant, participated in the decision-making process regarding the sale.

In a statement Monday, School Board Vice President Michael DeBell said, “The auditor confirms that we had an open, public process and the board handled the sale of this school appropriately.”

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DeBell, in an interview Monday, said the school was the last of five to be converted to community centers under what he described as a successful program using state and city funding.

The sale was the subject of a Seattle Times report in June, which chronicled how the district passed up an offer worth as much as $9.7 million from The Bush School, located next to the school, in favor of a $2.4 million bid from First AME funded by taxpayer dollars.

Bush, an affluent private school in Madison Valley, wanted to tear down the building and turn the property into sports fields and a playground, with public access on weekends and the summer. The district also passed up an offer from a neighborhood group that had a concrete proposal for youth- and social-services programs.

The Times story described how the district bent over backward to get the empty school into the hands of well-connected First AME. The audit also documented those efforts, while finding them to be within rules.

The sale was the first test of a revised policy that allowed a low bidder to purchase a surplus school as long as the bidder committed 50 percent of the property to youth programs and social services.

The School Board voted to sell MLK to the church in October 2010, prompting a subsequent search by First AME to find tenants to provide youth and social programs at the site.

In a statement Monday, the school district said the sale price was equal to the fair market value as established by an independent appraisal. Auditors noted that the price exceeded 90 percent of the appraised value, as required by law.

The district also said First AME has made a number of improvements to the building to ensure the site is used as a community center, including reroofing half of the main building and all of a portable. First AME also has done asbestos abatement throughout the building and general repairs to the classrooms and exterior lot, the district said.

Under a 40-year covenant requiring the site be used to benefit youth education, First AME must provide a detailed report to the district by Dec. 31 showing the progress it has made.

Citing the covenant, auditors found state funding for the acquisition wasn’t a gift of public funds.

First AME has reported that the Community Center on the property is open from 7:30 a.m. to 9 p.m. daily, with free use of the gym and auditorium to youth and service programs five days a week, the district said. A playground also is available when not in use by the center.

Norwood Brooks, a volunteer who heads the First AME effort, said Monday that a boiler also has been fixed and that 10 of 12 classrooms have been leased to a variety of for-profit and nonprofit organizations, offering services that include dance, tutoring and day-care administration.

More than 800 youth participated in programs in the gym and auditorium between June and September, including Seattle University students and Camp Fire USA members, Brooks said.

“I think we are well ahead of what we need to do,” he said.

Auditors found that former facilities official Stephens, who now works for the U.S. Department of Commerce in Washington, D.C., did not use “any influence” to favor First AME or pass inside knowledge of the sale process to anyone related to First AME. The conclusion was based on documents and emails, as well as interviews with current and former district officials, including Stephens, the audit report said.

Stephens also came under scrutiny early this year in the school-district scandal involving its minority and small-business contracting office, which he supervised. A state audit found $1.8 million in district funds had been misspent in a program rife with cronyism.

The auditor’s only recommendation stemming from the MLK matter was that the district establish a formal plan for employees to recuse themselves from a decision — a process the district said it is already using.

Information from Seattle Times archives is included in this story.

Steve Miletich: 206-464-3302 or

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