The property crash will see an Angus school once valued at £750,000 sold at a third of the price.
Council officers have recommended a £250,000 offer for the vacant Seaview Primary in Monifieth be accepted. The drop in the market since 2006 and a previous bidder going bust have been blamed for the drastic dive in price.
Strategic director of communities Alan McKeown said the offer was not “unreasonable”.
In a report to come before the corporate service committee on Thursday, he said the “clean offer” from Tayfield Investments Limited should be accepted.
“The residential development market is still showing a subdued performance and this is not anticipated to greatly improve over the coming years,” he said.
“Accordingly, it is considered unlikely that Angus Council would achieve a greatly increased capital receipt within the next two years if this offer were rejected and the property remarketed.
“In addition, ongoing maintenance costs would be incurred. J&E Shepherd have provided estimated costs for the proposed development.
“Taking into account sale fees, advertising, marketing costs, finance costs, profit etc, the price proposed may be toward the lower end of the expected scale but it is not considered to be unreasonable.”
The offer would see the school building, nursery and grounds sold.
The site was deemed surplus to requirements in September 2008 and was subsequently placed on the open market. Three offers were received by the initial closing date in August 2009, with a £500,000 bid from MLTW Ltd accepted.
Planning consent for a residential development of four houses and landscaping was granted but the firm then went into administration. There has been little interest over the last two years until Tayfield made their bid.
In 2008, it had been hoped a bumper payday from the sale of the site could be used to help pay for the replacement school and enhance Community Learning and Development (CLD) facilities in Monifieth.
Mr McKeown said: “Delaying any sale would further incur sizeable running costs associated with securing the building, maintaining minimal heating, rates costs, grounds maintenance etc.
“The cashflow impact in the form of higher loan charges from delaying receipt of the sale proceeds would also be a significant factor.
“It is considered that acceptance of this recent offer is the best value option for the council.”
Accepting the £250,000 bid will create a shortfall of £50,000 in the 2013/14 education capital budget.
In April, firefighters were called to the disused annexe at Seaview following a suspicious fire that saw two engines from Balmossie station called to the derelict site.
The “significant risk” of further vandalism to the site has also been factored into the council’s thinking on the offer. The replacement Seaview Primary in Victoria Street opened in 2010.