With Sale of GDS MacArthur Campus Pending, DCPS Expresses Interest in Purchase

In the past two years, GDS has accepted an offer from an unknown buyer to purchase the old lower/middle school building located at 4530 MacArthur Boulevard. GDS hasn’t released any information on the intended buyer and formally owns the property until the sale is completed, but D.C. Public Schools (DCPS) has expressed interest in buying the property. 

The MacArthur campus was built under the leadership of Edith Nash, who was the second Head of School. GDS’ website says, “Starting as K-9th grade, the original building was designed to be a ‘place to explore and use.’ And, as the grades it housed changed and the student population increased, the building expanded over the years to include more gathering spaces and state-of-the-art facilities.”

Freshman Katherine Davies attended school at the MacArthur Boulevard building before learning transitioned online in the spring. “I loved the GDS building,” Davies said in an interview. “It had a lot of unique elements and I had great memories there.”

Amanda Deringer, the director of High School admissions, said, “I’m really excited and proud of our leadership team, CFO and Russell in making [the sale] happen.” Deringer said that a unified campus would attract more families to GDS. “We are super excited to talk to families about a unified campus and we can offer more activities like the mentor program,” she said.

The sale process between GDS and the current buyer started prior to the pandemic. It is unclear whether the current buyer would be interested in selling its newly acquired property to DCPS or whether the plans of the current buyer have changed due to COVID-19.

For years, D.C. public elementary, middle and high schools in Wards 2 and 3 have been overcrowded. According to a community working group report published in 2019, all schools in those wards are expected to be overenrolled by 2025.  However, the pandemic may impact enrollment in public education, so DCPS may no longer need additional space.

In the fiscal year 2021 District of Columbia budget, the city government allocated up to $48 million to purchase the GDS property. According to the D.C. Office of Tax and Revenue, the assessed value of the land and building together is $20.5 million. 

Councilmember Mary Cheh of Ward 3 noted in her July newsletter to her constituents that buying the GDS property would be “a once in a generation opportunity, and if the government doesn’t act to purchase the property now, it will surely be sold by next year.” 

A potential issue for DCPS is that GDS already has a buyer committed to purchasing the property. Mitch Ryals, a journalist for the Washington City Paper, reported in August that the planned buyer is another private school. Some private schools in the D.C. area operate in leased space and might be interested in purchasing a permanent property, or looking to expand their campuses.

The identity of the buyer is concealed in a non-disclosure agreement, a fact that Jeffrey Houser, GDS’ chief financial officer, confirmed in an interview. Later in an email he said “we’ve been under contract for about two years,” though the non-disclosure agreement precluded him from sharing the closing date of the deal. The agreed purchase price is also confidential. 

In the context of a real estate transaction, a non-disclosure agreement (or NDA) is a legally binding contract which prohibits the buyer and seller from disclosing any information regarding the sale, such as the purchase price, the closing date or even the identity of the buyer. Violating the agreement could result in the cancellation of the sale or even financial penalties.

Citing the agreed confidentiality agreement, James Molloy, the real estate agent representing the current buyers, declined a request for an interview with the Bit

The mysterious identity of the purchaser is itself a problem for DCPS because it’s unclear with whom the District would negotiate. Jonathan Bender, the chair of Advisory Neighborhood Commission 3E, whose district includes the high school, said in an email that “GDS still technically owns the school, and because of a confidentiality agreement between MTP [mysterious third party, referring to the current buyer] and GDS, GDS is not permitted to disclose MTP’s identity.”

When asked about GDS’ role in a potential sale to DCPS, Houser said, “It doesn’t matter to us if another party is interested. If another party was interested, then they would have to go through the [original] buyer.” While GDS legally still owns the property, the intended buyer could negotiate with DCPS to sell the property to the city upon completion of the sale to the original buyer.

Many details of this sale are unclear and are confined to an NDA. Houser said, “GDS is not allowed under the agreement to express, mention, or articulate any of the details of the confidentiality agreement to anyone.”

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