The Wake County school system could find that there's no such thing as a "free school" after all.
As noted in Saturday's article in The Cary News by Andrew Kenney, a developer is suing the Town of Cary and the school system for a $6 million refund on money that was given to build Mills Park Elementary School.
The lawsuit represents the latest chapter in the fallout caused by efforts by slow-growth advocates in Cary dating back to 1999 to get developers to help pay for costs such as new schools caused by their projects.
Let's start with the history lesson.
Back in 1999, Cary had a water shortage so it set up an allocation system to divide the modest amount of remaining capacity between commercial and residential developers.
The system favored older projects, something that could hold back newer mixed-use projects such as Cary Glen, now called Cary Park. The town added a clause that it would provide water for any new school, and several City Council members said that could be stretched to include projects like Cary Glen.
The result was that the developer of Cary Glen began negotiations with the school system to donate $6 million for a new elementary school.
The deal was heavily promoted by then-Councilman and later Mayor Glen Lang.
In December 2000, the Cary Town Council gave permission for denser development of Cary Glen in return for the developer providing the new school. The developer would either build a $6 million elementary school or give the money to the school to build it.
Initially, the school system was cool to the deal, noting how #6 million wouldn't fully cover the cost of a typical, new 650-seat elementary school, which cost $10 million at the time.
Another point of contention was that the developer wanted the school system to set aside 75 percent of the seats for Cary Glen residents.
In January 2001, the school system wrote a letter to Lang saying it would accept the school if they got $10 million or if it received ownership of the school. At the time, the plan was for the developer to turn the school over to a nonprofit foundation, which would lease the building to the district.
Lang, who was mayor then, warned that they'd turn the school over to the operator of a charter school or private school if the school board didn't sign on to the agreement.
After much negotiation, the school board signed off in the deal in March 2002. The deal called for the developer of the now renamed Cary Park to give $5.5 million for the school and $500,000 to buy the land for the site.
The town also agreed to offer Wake the opportunity to acquire additional property on the site for a future middle school at the same price the town would pay for the land.
In return, the school board agreed to set aside at least half the seats for Cary Park students. It was the first, and last time, that the board agreed to reserve seats at a school.
But since Wake wasn't getting $10 million, this Cary Park school would only have 400 students and lack some amenities found at traditional 650-seat elementary schools. There was talk of opening the school in 2005.
The school system later dropped the seat set aside and elected to use the money to help build the full-size Mills Park Elementary School.
Jumping back to The Cary News article, Panther Creek-Raleigh, developer of the Cary Park area, contends the town unlawfully required the company to pay millions of dollars to fund construction of Mills Park Elementary.
The company and its co-plaintiff, Cary Park Associates, argue that the town was not authorized by state law to manage the funding and construction of schools, and they say that the school board also was wrong to take the money.
By funding the school, Panther Creek fulfilled a now-repealed town rule that essentially required developers to mitigate the burden on schools created by new subdivisions.
This lawsuit comes after an earlier lawsuit from builders of a different project that argued that town officials demanded funding for schools before new subdivisions would be approved. Lower courts ruled in favor of the builders and the N.C. Supreme Court split on the issue last year, leaving the town and its insurance company to pay more than $800,000.