School District of Philadelphia

Proposed Adaptive Reuse Policy

DRAFT FOR PUBLIC REVIEW AND COMMENT

1. Purpose

The creation of a comprehensive facilities master plan for the school district is articulated in the School District of Philadelphia’s “Imagine 2014” Strategic Plan and
is predicated on the belief that a school district with a process to create, close, reconfigure, replace, and renovate schools can ensure that all students have
adequate and appropriate space to accelerate student achievement and ensure the equitable allocation of district resources.

The School Reform Commission (SRC) acknowledges that the School District of Philadelphia has excess capacity, which is a drain on resources that could be
better used to directly support academic improvement for all students. As a result of implementing rightsizing measures, schools in District-operated facilities will
be closed and become inventory that is designated as unused and unnecessary (“Available Property”).

This policy sets forth the manner in which the district will implement and administer adaptive reuse measures.

2. Definitions

a. Educational User (Tier 1): An organization that has been qualified by the School District as an education provider whose primary interest in the
Available Property is to operate educational programs with an emphasis on quality instruction based on information provided in a public solicitation of
interest process. Tier 1 Users are non-profit entities that may include charter schools, institutes of higher education, alternative education and other
educational program providers such as adult education and early childhood providers, etc. In order to be considered as a Tier 1 Educational User,
charter schools must have an existing, valid charter agreement and must agree not to seek additional charter seats in their proposal. If approved by
the SRC as an incentive to continue to offer educational services to the community, the School District may offer an Available Property to a qualified
Tier 1 Educational User at a discounted price of up to 25% off the fair market appraised value.

b. Community/Non-Profit User (Tier 2): An organization that has been qualified by the School District as a provider of community services or
promotes other uses that benefit the neighborhood or community at large and intends to develop the Available Property in question for one or more
beneficial community uses based on information provided in a public solicitation of interest process. Tier 2 Users may include non-profit
corporations, community- and faith-based organizations, public-private partnerships, partnerships and other entities partially owned by non-profit
entities, agencies of the City of Philadelphia and community development corporations. If approved by the SRC as an incentive to develop an
Available Property in ways that provide the most benefit to the community, the School District may offer an Available Property to a qualified Tier 2
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Proposed Adaptive Reuse Policy
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Community/Non-Profit User at a discounted price of up to 15% off the fair market appraised value (with an exception for the City of Philadelphia and
its agencies described in Section 3(c) below).

c. Private and Commercial Development (Tier 3): Any organization or individual that is not qualified as a Tier 1 or Tier 2 User. Tier 3 Users may
include for-profit entities, private individuals, commercial developers, including partnerships and limited liability companies.

d. RFP Evaluation Teams: A team assembled by the School District to evaluate and provide recommendations to the SRC regarding RFP
submissions for School District properties. Each Available Property to be sold will be assigned a separate team based on its location and unique
characteristics. Each team will consist of: (i) up to 3 School District representatives selected by the Superintendent’s Office; (ii) 2 to 4
representatives from community/civic organizations and stakeholders located in the area of the Available Property; (iii) 1 City representative from
City or Community Planning; (iv) 1 representative from the applicable Councilmanic District office; and (v) on a case-by-case basis, 1 representative
from the applicable Statewide Representative office. The Superintendent’s Office will nominate and approve the members of each RFP Evaluation
Team.

e. Redevelopment Agreement: Successful Tier 1 and Tier 2 Users buying an Available Property will be required to enter into an agreement that will
contractually require them to start and complete their proposed development within a reasonable period of time. Failure to perform can result in
termination of the Redevelopment Agreement and/or reverter of title to the Available Property back to the School District.

3. Adaptive Reuse Policy

a. School Closures/Unused and Unnecessary Property: A stated goal of the Facilities Master Plan is to identify options for surplus real estate. If a
school property is slated for closure to meet optimal District-wide utilization goals, the process for closing a school is mandated by Pennsylvania law
(24 P.S. Sec. 7-780).
The School District has a current inventory of properties that have been declared unused and unnecessary by the SRC. It is expected that some of
the schools closed as a result of the Facilities Master Plan will also be declared unused and unnecessary for School District purposes and must be
disposed of as surplus inventory. The properties closed under the Facilities Master Plan and some of the existing inventory will be sold and
repurposed pursuant to this Adaptive Reuse Policy.

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Proposed Adaptive Reuse Policy
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b. Solicitation of Interest / Classification of Users: The School District will issue a public solicitation of interest (“RFI”) from individuals and
organizations interested in purchasing and reusing Available Property. Applicants will be asked to provide information regarding their: (i) proposed
development and use of the Available Property; (ii) experience/capability to develop the Available Property; (iii) type of entity and its business model;
(iv) financial capacity to complete the sale and development; and, (v) target geographic area(s) of the School District. The information submitted will
be reviewed and the School District will provide recommendations to the SRC regarding the classification of each applicant as a Tier 1, 2 or 3 User.
The SRC has final discretion to approve the recommendations or reclassify the applicants.

c. Matching Process for Unused and Unnecessary Properties and Tier Users: Each Available Property will be evaluated by the School District
using appraisals, property condition assessments, underlying bond issues and other factors to identify one or more preferred adaptive reuse(s). The
evaluation criteria may include, but is not limited to: (i) property condition; (ii) capacity, accessibility, classroom size; (iii) amenities (e.g., gym,
cafeteria, athletic fields); (iv) historic district or designation; (v) neighborhood composition and needs; and, (vi) availability of tax incentives and public
funding. Based on this evaluation, the School District will make a recommendation to the SRC regarding how the Available Property should be
offered, including whether to make it available to one or more of the qualified Tier User groups. Upon approval of the recommendation to the SRC,
the Tier Users and the properties will be matched based on the information provided in the RFI and the property criteria. The School District will
have the discretion to offer Tier 1 and Tier 2 Users discounts off the fair market value of an Available Property as described in the Definitions above,
to incentivize adaptive reuses that are the most beneficial to the community and to promote the continued educational use of the Available
Properties. In the event that the RFI/RFP offering fails to yield a qualified, interested buyer satisfactory to the School District, the 15% cap on the
discount that may be offered to non-profit Tier 2 Users may be waived in order to transfer Available Property to the City of Philadelphia for beneficial
community development purposes.

d. RFP/Applications for Surplus Properties: The School District will use the matches to provide Request for Proposal (“RFP”) application packets to
qualified Users. Each User receiving an RFP application packet will be given the opportunity to tour the applicable property and receive certain
background due diligence information regarding the history, title and physical condition of the property. Proposals will be submitted and reviewed by
the RFP Evaluation Team, using criteria including: (i) type of use; (ii) experience of User; (iii) funding availability; (iv) community support; (v) timing of
development; and (vi) expenses to be borne by the School District (e.g., security, ongoing maintenance/repair, etc.). Each qualified User submitting
a proposal will make a public presentation to the RFP Evaluation Team summarizing its plans for the Available Property to allow the Team members
and any interested members of the public to learn about each proposal that is being considered. The School District will partner with City agencies
such as the Redevelopment Authority and the Philadelphia Industrial Development Corporation to evaluate and negotiate with Tier 2 Users. The
RFP Evaluation Team for each property will make a recommendation regarding the RFP’s it evaluates to the SRC. If approved by the SRC,
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Proposed Adaptive Reuse Policy
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successful Tier 1 and Tier 2 Users will be required to enter into Redevelopment Agreements. The proceeds from the sale of any Available Property
under this Adaptive Reuse Policy will be placed in a special capital fund that, to the extent available and with the guidance and needs of the
community in mind, will be used for the improvement of School District properties in the particular community surrounding each Available Property.

4. Implementation

a. Responsibility: Subject to the direction and approval of the Superintendent and the SRC, an office designated by the Superintendent will be
responsible for the implementation of this Policy and the procedures set forth herein in accordance with applicable law, including, but not limited to,
the Pennsylvania Public School Code.

b. Applicability of SRC Policies and Other Laws: Where appropriate and in accordance with Pennsylvania law, the School District may suspend or
offer exemptions to certain policies or laws when those policies, regulations or laws may inhibit the implementation of the Facilities Master Plan and
this Policy. Suspensions of or exemptions to any applicable law or policy shall be identified in the recommendations to close particular schools, in
applicable resolutions approving the sale of such properties and in each Available Property’s RFP and Redevelopment Agreement.

c. Application: This Policy will apply to all School District Available Properties that are closed and declared unused and unnecessary pursuant to the
recommendations in the Facilities Master plan and properties in the School District’s existing inventory that are approved for offering by the SRC.
While the Adaptive Reuse Policy is in effect through 2014 (when a re-evaluation and integration of both the Adaptive Reuse Policy and the Real
Property Management Policy will be made in light of the Facilities Master Plan update), the portions of the Real Property Management Policy
concerning the sale and leasing of School District properties that conflict with the Adaptive Reuse Policy will be suspended, including, but not limited
to Sections 5(a) and (d) in their entirety. In the event that any remaining portion of the Real Property Management Policy is in conflict with the
Adaptive Reuse Policy, the provisions of the Adaptive Reuse Policy will govern.