What began as an effort to preserve Columbia’s historic theater and bring the long-vacant building back into use has now become a legal dispute that will apparently require the courts to determine the future ownership of the property.
After months of negotiations, then superintendent Dr. Pamela Stephens and Dr. Ben Arnold entered into a contract for the Columbian Theater on July 21, 2022, with approval from the school board.
Arnold donated the building to the school district. Should the district not use the building for educational purposes, Arnold could reclaim ownership for $1, an agreement called a “first right of refusal.”
The contract was never officially filed in the county clerk’s office.
A second document was signed on Oct. 17, 2022, with the same conditions except the purchase amount. This document states that Arnold would be able to purchase the property back at fair market value. The contract was never approved by the school board but was filed with the county clerk on Nov. 14, 2022.
After Jason Faulkner became superintendent in July 2023, he requested an evaluation of the building by the architect for the new Adair County Middle School. He quickly learned the project cost could exceed $500,000. By that time, approximately $280,000 had already been spent, and the funding expected to complete the project was not approved by the Kentucky Department of Education.
A Disagreement Begins Among Board Members
The theater has been the subject of several board meetings this year. On Feb. 19, the board voted to declare the theater surplus, and on May 11 the board approved the creation of a BG-1 form. These steps are necessary prior to any board decision regarding the disposition of property.
Board member Troy Grider abstained from those votes, telling the Community Voice it could be a potential conflict of interest. When the project was originally approved, however, Grider served as board chairman and voted to approve the project and the original contract.
Grider has publicly criticized the board’s plan to call for a vote to return the theater to Arnold for $1, questioning the legality of the process. Arnold, the past owner who donated the property to the school district, stands by the contract that allows him to receive the property for $1. Faulkner said the property has been assessed at a value of $51,000, which Arnold would have to pay to take ownership of the property should the second contract be enforced.
Throughout the process, board attorney Mike Owsley has been asked to provide legal guidance on the issue.
Owsley acknowledges that Kentucky Department of Education regulations require surplus property be sold at fair market value. However, he recognized the unique situation because the district had entered into a valid agreement with Arnold allowing him to repurchase the property for $1. There was no simple answer.
“We have examined the pros and the cons, and I do believe that from a legal standpoint, it is appropriate for the district to get this behind them,” said Owsley. “My understanding is that the cost of further improvements to the property would be perhaps in excess of $300,000.”
The future of the theater has become one of several areas of contention between Grider and other board members, with disagreements leading the other board members to begin steps necessary to remove Grider from the board. He is accused of violating the school board’s ethics policy by getting involved in personnel issues on a separate issue.
Three weeks after the board began the process to remove Grider from office, Detective Dexter Colvin with the Kentucky State Police emailed Faulkner, questioning the legality of returning the property to Arnold for $1, noting that he had received a complaint.
In the email received by the Community Voice through an open records request, Colvin referenced how much has been spent on the project thus far. He had attempted to contact the Kentucky Department of Education to learn if they approved a transaction outside of legal guidelines.
Colvin’s email alludes to a criminal investigation.
“Can you provide anything showing KDE approved the exchange beyond what is provided in 702 KAR 4:090? This information would help me determine a disposition for the current criminal investigation I have open regarding Official Misconduct, 1st Degree,” he wrote.
Colvin’s email indicates the investigation is examining whether official misconduct occurred in connection with the proposed transfer, even though the board has not yet taken final action regarding the future ownership of the property.
Lindsey Tate Porter, also an attorney for the school board, responded to Colvin’s email. She referenced minutes from July 21, 2022, where the board voted to accept the deed of the property and grant the right of first refusal.
She points out in her email that Grider served as the chairman of the board and signed the minutes from the meeting, affirming his approval.
Porter also wrote that KDE District Facilities Branch Manager John Gilbert has worked with the district in this matter.
“They [KDE] understand the district could be sued for breach of contract in the event the right of first refusal agreement that was approved by the Board in 2022 is not honored – potentially exposing the district to a six-figure liability for breach of contract,” she wrote.
She also referenced a letter to the Attorney General and other documents pursuant to the board’s attempt to remove Grider due to alleged flagrant misconduct, violation of board policies and statutes.
A Costly Path Ahead
It appears there is no clearcut legal path for the school board at this time. While the majority of board members appeared ready to take the loss and return the property to its former owner for $1, a KSP investigation and potential litigation apparently leave one option: ask the courts to figure it out.
The disagreement over the theater and other legal battles involving the growing disagreements among board members have already cost the school board – and taxpayers. From May through August, the total amount billed by board attorneys is $12,959. These fees include personnel issues Grider became involved in when a family member was terminated, assisting board members with their referral of Grider to the Attorney General, and the issue with the contracts of the theater.
The fees will continue to accumulate as the board is now seeking a declaratory judgement action from the courts.
What was once considered by many to be an exciting action by the school district to preserve a local landmark for future generations has quickly become a financial drain with no victory in sight. Meanwhile, the popular lights of the Columbian Theater will remain dark.
By Amy Pike
amy@adairvoice.com
