Can a Bentonville School District donate nine acres of land for affordable teacher housing and a community center, and what triggers a charter school's right of first refusal?

Plain-English summary

This is a follow-up opinion. The earlier Opinion 2023-065 said that Bentonville School District could probably donate a nine-acre tract to a nonprofit to develop affordable housing for school staff plus a community center. Senator Bryant came back with seven sharper questions about the legal mechanics of the donation.

The AG's answers, in plain terms:

1. The AG does not "find facts." When the original opinion said the land was not required for the school district's present or future needs, the AG was repeating what the opinion request told him. The school board, not the AG, is the entity that decides whether the property is "required" for the district's needs.

2. Donating land is not the same as having no need for affordable housing. A district can have a need for staff housing without the specific nine acres being "required" to meet that need. Other paths exist (different land, market-rate units, partnerships). The statute is about the property, not the abstract need.

3. The "educational benefit" prong is qualitative, not quantitative. Section 6-21-108 only requires that the donation "serve a beneficial educational service for the citizens of the school district." It does not specify how much educational benefit, how many acres of strict educational use, or any threshold percentage.

4. The donation does not have to serve education in perpetuity. The statute does not set a time limit, but it also does not allow restrictions or reservations. The district keeps a right of first refusal to reacquire the property if the donee tries to sell or otherwise dispose of it.

5. Land "adjacent to the high school" is probably not an "academic facility." The charter school right of first refusal in § 6-21-816 only applies to "academic facilities," which are buildings or spaces (and their related grounds) where students receive instruction integral to an adequate education. Empty land next to a high school where no instruction occurs is not an academic facility, even if it borders one. The AG narrowly reads "related areas" to not encompass an entire school campus.

6. Whether the land is an "unused or underutilized public school facility" is a Department of Education determination. Three of four statutory criteria appear met (real property; not in educational use; not under third-party lease as of August 1, 2017). The fourth, whether nonuse threatens the integrity or purpose of a public education facility, is for the Division of Public School Academic Facilities and Transportation. The Division apparently has not so designated the land.

7. There is no minimum educational benefit percentage. The constitutional question is whether the property is being used to benefit the district's students, which is fact-specific.

What this means for you

School board members and district administrators

If you are considering a similar donation, document carefully. The school board is the factfinder for whether the property is "required for present or future needs." The board's discretion is broad and courts review under abuse-of-discretion or arbitrary-and-capricious standards (Springdale Board of Education v. Bowman). Make sure your master facilities plan reflects that the property is not slated for future district use, and document the educational benefits the donation will produce (whether through teacher recruitment, classroom space in a community center, or otherwise).

The right-of-first-refusal trigger for charter schools is narrower than people sometimes assume. It applies to "academic facilities," not to all real property a district might own. Empty undeveloped land that is not used for instruction is not an academic facility, even if it is next to one. If the donation involves a building where students currently receive instruction, the charter analysis changes.

Charter school operators

The right of first refusal under A.C.A. § 6-21-816(b)(1) applies only to "academic facilities" being sold, leased, or transferred. Buildings and spaces where students receive instruction integral to an adequate education are protected. Adjacent undeveloped land that has not been used for instruction probably is not. If a district is donating raw land to a developer for housing, that is unlikely to trigger your ROFR.

The separate "unused or underutilized public school facility" requirement under A.C.A. § 6-21-815 has a similar pattern: it captures real property that meets four criteria, including a fact-specific finding by the Department of Education that nonuse threatens the integrity or purpose of the facility. Watch the Division's published list, and notify the Division if you suspect a property qualifies.

Real estate developers and nonprofits working with school districts

The donation pathway under A.C.A. § 6-21-108 is open to certain limited entities for certain limited purposes. Verify your nonprofit qualifies, document how the project benefits the district (especially the educational nexus), and accept the school district's right of first refusal if you ever decide to sell or transfer the donated land. The right of first refusal is statutory and cannot be waived.

Public education attorneys

The opinion confirms two important points: (1) the AG does not adjudicate fact questions in opinion requests, so the actual "required for needs" determination is a school board fact-finding matter that gets review under deferential standards, and (2) the "academic facility" definition is read narrowly to avoid pulling raw campus land into the charter ROFR. Pre-litigation, push for the school board's record to clearly document the needs assessment, the educational benefit analysis, and the property's status (not currently used for instruction).

The "unused or underutilized" framework under § 6-21-815 is interesting because it creates a separate, parallel claim that the AG analyzed but said is for the Division to determine. If a charter school suspects a property qualifies, file a notice with the Division and let the administrative process play out.

Common questions

Was the original opinion (2023-065) wrong?
The AG does not retract any part of Opinion 2023-065. He clarifies that he was not "finding facts" but rather working from the facts presented. The conclusions remain: a district can probably donate the property, the donation likely satisfies the constitutional and statutory requirements, but the school board is the body that has to make the actual determinations on facts.

What if the donation only dedicates two acres to teacher housing and the rest to non-educational uses?
The statute does not set a percentage minimum. Section 6-21-108 requires that the donation "serve a beneficial educational service for the citizens of the school district." A board could theoretically structure a donation where most of the land goes to non-educational uses but the donation as a whole still produces educational benefits. Whether a court would agree is a fact question.

Does the donee have to keep the educational benefit going forever?
The statute does not set a time limit. The donating district retains a right of first refusal to reacquire if the donee decides to sell or transfer (A.C.A. § 6-21-108(d)(1)). Otherwise, the donation is "without any reservations or restrictions" (§ 6-21-108(b)(2)).

What happens if the donee abandons the educational use?
The right of first refusal protects the district if the donee tries to sell or transfer. If the donee abandons or simply changes use, there is no statutory mechanism in § 6-21-108 to claw the land back. Districts negotiating donations should consider supplementary contractual protections, though the AG opinion's language about "without any reservations or restrictions" raises a question about whether such side agreements would be enforceable.

What is the difference between an "academic facility" and a "public school facility"?
A "public school facility" is broader. It is any school building or space (including grounds) used for any purpose: extracurricular, prekindergarten, administrative, or instructional. An "academic facility" is narrower. It is a building or space where students receive instruction integral to an adequate education. Buildings used purely for administration or extracurriculars are public school facilities but not academic facilities. The charter ROFR applies only to academic facilities; the unused/underutilized framework applies to public school facilities.

Can the school district donate land subject to a deed restriction requiring continued educational use?
The statute says donations must be "without any reservations or restrictions" (§ 6-21-108(b)(2)). A deed restriction would arguably violate this. The right of first refusal is the statutory mechanism for the district to recover the property. Beyond that, restrictive language is statutorily disfavored.

Background and statutory framework

Donation authority. A.C.A. § 6-21-108 lets a school district donate real property "not required for the present or future needs of the school district" to a limited list of recipient entities. The donation must "serve a beneficial educational service for the citizens of the school district" (§ 6-21-108(b)(1)). Donations must be made "without any reservations or restrictions" (§ 6-21-108(b)(2)). The district retains a right of first refusal to reacquire if the donee sells or transfers (§ 6-21-108(d)(1)).

Constitutional limits on school property use. Ark. Const. art. 2, §§ 8 and 21, and art. 14, §§ 1 and 2, prohibit using school money or property for purposes other than benefiting public schools. This adds a constitutional layer on top of the statutory donation requirements.

"Academic facility" definition. A.C.A. § 6-21-803(1)(A) defines academic facility as "a building or space, including related areas such as the physical plant and grounds, where public school students receive instruction that is an integral part of an adequate education." Subsections (B)–(D) explicitly exclude buildings dedicated to extracurricular activities, prekindergarten education, and district administration.

"Public school facility" definition. A.C.A. § 6-21-803(13) defines public school facility as "any public school building or space, including related areas such as the physical plant and grounds, that is used for any purpose," which is broader than academic facility.

Charter school right of first refusal. A.C.A. § 6-21-816(b)(1) gives an open-enrollment public charter school a right of first refusal to purchase or lease an academic facility being sold, leased, or transferred by the district, at fair market value. Subsection (b)(1)(B) extends this for two years after the property was last used as an academic facility.

"Unused or underutilized public school facility." A.C.A. § 6-21-803(17) defines this as real property that (1) is a public school facility, (2) the whole or significant portion of which is not used for educational, academic, extracurricular, or administrative purpose, (3) the nonuse of which threatens the integrity or purpose of the facility as a public education facility, and (4) is not subject to a third-party lease or executed offer to purchase as of August 1, 2017. A.C.A. § 6-21-815(c)(1)–(2) requires the district to make such facilities available for lease or purchase at fair market value to charter schools in the district.

School board discretion and review. Safferstone v. Tucker, 235 Ark. 70, 357 S.W.2d 3 (1962) (Arkansas Supreme Court), and Pugsley v. Sellmeyer, 158 Ark. 247, 250 S.W. 538 (1923) (Arkansas Supreme Court), establish that courts will not interfere with school board decisions absent abuse of discretion or refusal to perform a clear duty. Springdale Board of Education v. Bowman, 294 Ark. 66, 740 S.W.2d 909 (1987) (Arkansas Supreme Court), confirms the abuse-of-discretion / arbitrary-and-capricious standard.

Statutory interpretation. Weiss v. Central Flying Service, Inc., 326 Ark. 685, 934 S.W.2d 211 (1996) (Arkansas Supreme Court), holds courts must reject interpretations producing absurdity. Antonin Scalia & Bryan A. Garner, Reading Law (2012), supports interpretations furthering rather than obstructing the document's purpose.

Citations

• A.C.A. § 6-21-108 (donation of real property)
• A.C.A. § 6-21-108(b)(1) (educational-service requirement)
• A.C.A. § 6-21-108(b)(2) (no reservations or restrictions)
• A.C.A. § 6-21-108(d)(1) (right of first refusal for the donating district)
• A.C.A. § 6-21-803(1)(A), (B)–(D) (academic facility definition)
• A.C.A. § 6-21-803(13) (public school facility definition)
• A.C.A. § 6-21-803(17) (unused or underutilized public school facility definition)
• A.C.A. § 6-21-815(c)(1), (c)(2) (charter school access to unused facilities)
• A.C.A. § 6-21-816(b)(1) (charter school right of first refusal for academic facilities)
• A.C.A. § 6-21-816(b)(1)(B) (two-year window after last use as academic facility)
• Ark. Const. art. 2, §§ 8, 21; art. 14, §§ 1, 2 (constitutional limits on school property)
• Safferstone v. Tucker, 235 Ark. 70, 357 S.W.2d 3 (1962)
• Pugsley v. Sellmeyer, 158 Ark. 247, 250 S.W. 538 (1923)
• Springdale Bd. of Educ. v. Bowman ex rel. Luker, 294 Ark. 66, 740 S.W.2d 909 (1987)
• Weiss v. Cent. Flying Serv., Inc., 326 Ark. 685, 934 S.W.2d 211 (1996)
• Prior opinion: Ark. Att'y Gen. Op. 2023-065 (original Bentonville donation opinion)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2023-106
April 29, 2024
The Honorable Joshua Bryant
State Senator
Post Office Box 718
Rogers, Arkansas 72757
Dear Senator Bryant:
I am writing in response to your request for a follow-up opinion relating to Attorney General Opinion 2023-065. In that opinion, I was asked whether the Bentonville School District could lawfully donate real property to a not-for-profit corporation for the development of affordable housing, some of which would be designated for school employees, and a community center that would provide classes to the school district's students and citizens. I opined that the described proposal would likely survive constitutional and statutory scrutiny.

You have asked the following follow-up questions, which I have paraphrased below:

1. I would like to know how you determined that the nine-acre tract of land is not required "for the future or present needs of the school district" when the express reason for donating the land is because the school district needs affordable housing to staff its schools. If the school district needs the housing and the only means of obtaining the housing is with the land, doesn't that then mean that the land is required for the future or present needs of the school district?
   Brief answer: I did not "determine" that the land is not required for the present or future needs of the school district because, as explained in Opinion No. 2023-065, I am not a factfinder when issuing opinions. Rather, I accepted as true the facts presented in the opinion request. Those facts indicate that the property is not required for the school district's present or future needs. Finally, to the extent the question suggests that any donation of real property that meets a school district's "needs" makes the property itself "required" to meet that need, I believe this is an improper construction of the A.C.A. § 6-21-108.

2. If the Bentonville School District's Board of Directors determines that the land is not required for the school district's present or future need and, in turn, donates the land for the purpose of serving an express need of the school district, would that conduct be subject to legal challenge?
   Brief answer: I cannot offer legal advice on whether you or any other interested party may have a cause of action against the Bentonville School District's Board of Directors. I can state the relevant legal standard: any party challenging the board's decision would need to show that the board abused its discretion or acted arbitrarily, capriciously, or otherwise contrary to law.

3. Given that the stated objectives of the development clearly involve both educational and non-educational goals, how much educational benefit must be derived from the land before the donation is deemed to satisfy the statutory requirement. If the land is predominantly developed for non-educational reasons, may the land still be donated? For example, if no more than two acres will be dedicated to teacher housing and student learning, may the district still donate the other seven acres despite their lack of educational ties?
   Brief answer: The statute authorizing school district to donate real property does not specify "how much educational benefit must be derived from the land." It only requires that the donation itself "serve a beneficial educational service for the citizens of the school district," while the Arkansas Constitution requires that the donation benefit the district's students.

4. Generally speaking, how long must property donated under A.C.A. § 6-21-108 serve an educational benefit? More specifically, must the land serve a "beneficial educational service for the citizens of the [Bentonville School District]" in perpetuity?
   Brief answer: The statute does not set a period of time for which the donated property must serve a "beneficial educational service," but it allows the property to be donated without any restrictions, except the donating school district retains a right of first refusal to reacquire donated real property if the donee decides to sell or otherwise dispose of the real property.

5. A.C.A. § 6-21-816(b)(1) states, "If a school district decides to sell, lease, or otherwise transfer ownership of an academic facility, an open enrollment public charter school located within the school district's boundaries shall have a right of first refusal to purchase or lease the facility for fair market value." An "academic facility" is defined as a "building or space, including related areas such as the physical plant and grounds, where public school students receive instruction…." A.C.A. § 6-21-803(1)(A). Is the land, which is "adjacent to the high school," sufficiently part of the school's grounds such that it constitutes space where students receive instruction?
   Brief answer: Although the relevant law does not define the phrase "related areas such as physical plant and grounds," I do not believe, for reasons explained below, that these "related areas" are meant to encompass a large area around the building or space at issue. And they are certainly not meant to encompass an entire school campus. Therefore, the answer to your question is likely "no." While I cannot definitively opine on whether any specific piece of property qualifies as an "academic facility" because that is a question of fact, the facts presented suggest that the undeveloped land is probably not an "academic facility" under A.C.A. § 6-21-816(b)(1).

6. Similarly, A.C.A. § 6-21-815(c)(1) states that a "school district shall make unused or underutilized public school facilities available for lease or purchase for no more than the fair market value to any public charter school located within the geographic boundaries of the school district." The code defines an "unused or underutilized public school facility" as inclusive of "real property that, [a]s a whole or in significant portion, is not being used for public educational, academic, extracurricular, or administrative purpose and the nonuse or underutilization threatens the integrity or purpose of the public school facility or other real property as a public education facility…." A.C.A. § 6-21-803(17). Is the land unused or underutilized "real property" such that the Bentonville School District must identify it as an "unused or underutilized public school facility"?
   Brief answer: While the land at issue meets three of the four criteria necessary to be an "unused or underutilized public school facility," I cannot determine whether the fourth criterion has been met. This is a question of fact that must be determined by the Arkansas Department of Education's Division of Public School Academic Facilities and Transportation. It is my understanding, however, that the Division has not identified the land as an "unused or underutilized public school facility."

7. The opinion reasons that the proposed use for the land would not violate the constitutional prohibition against using "money or property belonging to the public school fund, or to this State," for a purpose other than benefiting public schools. Ark. Const. Art. 14 § 2. I would like to know how much public-school benefit is enough to survive constitutional scrutiny. The opinion appears to conclude that school money or property may be repurposed for predominantly non-educational uses as long as there remains a perfunctory educational nexus.
   Brief answer: Whether any particular donation will or will not benefit a school district's students is a question of fact to be determined on a case-by-case basis.

DISCUSSION
[Detailed responses to Questions 1 through 7 follow in the original opinion. The school board, not the AG, is the factfinder. The "academic facility" definition is read narrowly to exclude raw campus land that is not used for instruction. The "unused or underutilized" determination is for the Department of Education's Division of Public School Academic Facilities and Transportation. There is no statutory minimum percentage of educational benefit, and no time limit on educational use, but the donating district retains a right of first refusal.]

Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.

Sincerely,
TIM GRIFFIN
Attorney General