City of Germantown offered Memphis-Shelby County Schools $5 million for the suburb’s three namesake campuses and the adjoining 47 acres, Toni Williams, MSCS interim superintendent, said Friday, Nov. 18.

The offer, which Germantown Mayor Mike Palazzolo would not confirm, is the latest move in settling the dispute over which school district will control the 3Gs — Germantown elementary, middle and high schools. The three campuses, while inside the suburb, are operated by MSCS.

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Legislation has addressed an outside school district operating campuses inside another system’s boundaries. Germantown and MSCS have until the end of the year to address the question and try to come up with a solution.

The statement issued by MSCS indicates the larger district isn’t overly excited about Germantown’s offer.

“We know the market value for these parcels is significantly higher,” Williams said in the statement. “There are over 3,300 elementary, middle, and high school students who will need to be relocated as a result of this law. A new high school alone would cost approximately $125 million. We hope that all stakeholders can work expeditiously to move toward what’s best for the 3,300 children and 300 staff members at the center of the issue.”

When asked about the offer Friday, Palazzolo would not comment about the issue, simply stating he wanted to “act in good faith” with MSCS. 

It’s unclear how the offer might impact any potential agreement about transferring the schools’ ownership. With just more than a month away from a Jan. 1 deadline, the parties involved in the negotiations to put the Germantown namesake schools campuses under the suburb still don’t have a resolution.

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And the time is running out quickly.

The latest amount is significantly lower than the $25 million Germantown offered the larger district in 2017. It is unclear if the decrease is due to factors such as the deferred maintenance on the high school or the pressure of the legislation.

Representatives of MSCS and the City of Germantown officially say they are in talks regarding the deadline, but many say they are not close to a decision regarding the 3Gs.

Whether that is the actual status or an attempt to keep details of the talks secret is unclear. What is clear is that if no agreement is reached prior to Jan. 1, the law is prescriptive about what happens, but it allows MSCS to continue operating in the buildings for now.

The legislation was passed earlier this year to codify an attorney general opinion that one school district cannot operate within the boundaries of another. Germantown’s city limits and school district boundaries are synonymous.

What happens if there is no agreement before Jan. 1?

If no agreement is reached prior to the new year, Germantown Superintendent Jason Manuel will be required to execute an affidavit showing the transfer of the properties to Germantown Municipal School District, but the law also provides it could be transferred to the city. A demographic study shows GMSD does not expect large changes in enrollment and current facilities will meet future needs.

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The affidavit will be submitted to the register of deeds, and at that time, Germantown must pay 25% of fair market value for the “land and improvements.” The purchase price will be determined by an appraisal. Palazzolo indicated previously the city will help pay for the schools. The rest of the payment may be paid at the same time as the 25% or in eight annual installments following the transfer.

Palazzolo has repeatedly vowed to let current students of Germantown’s namesake schools finish in them.

What if an agreement is reached prior to the deadline?

If an agreement is reached before Dec. 31, the law does provide guidance about time limits. The agreement could allow MSCS to operate for another four years, and that could be renewed for an additional eight years if Germantown and MSCS agree, but 12 years is the maximum amount of time the county system could operate in those buildings, the law indicates. In the first four years, Germantown cannot charge MSCS rent.

The agreement must also specify school zones and which grades are taught at each school. MSCS is also responsible for improvements and utilities unless the parties outline otherwise in an agreement.

Leaders of the GMSD will not say much beyond a prepared statement: “Germantown Municipal School District is reviewing legislation and as always, is open to working with Memphis-Shelby County Schools regarding Germantown Elementary, Middle, and High Schools.”

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GMSD’s board has not been party to any meetings regarding a potential agreement, although Palazzolo said he met with MSCS leaders this week and talked about negotiations.

Althea Greene, MSCS board chairwoman, was not part of those meetings and was surprised to learn negotiations were discussed. However, she agreed the district needs money for a high school if it loses Germantown High.

The law states the buildings must be used for K-12 educational purposes, unless it’s in the best interest of the community to sell them.

Methodist Le Bonheur Healthcare was interested in purchasing Germantown High School. Some hoped it would allow the healthcare provider to offer services like those of MD Anderson Cancer Center in Houston, according to a source who spoke on the condition of anonymity. If Methodist acquires ownership of Germantown High before Dec. 31, then any agreement would impact Germantown Elementary and Middle schools.

Lucy Elementary, an MSCS school in Millington is also impacted by the legislation. Millington Superintendent Bo Griffin said initial conversations have occurred but there is no significant movement on the matter.