District 88 OKs building sale
NEW ULM – The District 88 Board of Education Thursday night approved the sale of the former school at 15 N. State St. to a group called Cenate.
The board also approved a community task force recommendation that calls for building a new high school and re-configuring pre-school, elementary and middle grades among existing school buildings.
Reed Glawe, an attorney with Gislason and Hunter and interim president of Cenate, recapped Cenate’s offer.
The group offered $25,000 for the school. The planned sale closing date is July 2. Coupled with the sale are two leases. One is a $1 per year, 10-year-lease back to the district of the auditorium and related space. The other is a $5,000 per month, two-year, lease of office space to the district.
The two-year lease allows the district to transition to alternative office space, while also allowing Cenate to apply for registering the building as a national and state historic landmark. The landmark designation would result in tax credits, which would make it financially viable to update the auditorium and repurpose the rest of the school into an apartment complex.
The building would be subdivided into two sections, with separate titles, Glawe also recapped. Cenate would split up into two groups, as well. Some members (those with interest in the performing arts) would own, operate and maintain the auditorium. Others would take responsibility for the rest, with the goal of turning the building over to a reputable developer after two years (the estimated time needed to gain tax credits).
Glawe addressed the issue of the auditorium’s murals, created as part of the Work Projects Administration’s (WPA’s) Federal Art Project. Some members of the public have expressed concern about the murals’ future, if a private party buys the building.
“I’d like to state as emphatically as I can that we are committed to keeping the murals where they are, and having them maintained in perpetuity,” said Glawe.
Cenate would likely transfer the murals over to a historic preservation organization that has the expertise to care for, and preserve them as they should be preserved, said Glawe.
The language in the agreement that refers to the murals is written in a way that ensures that “we don’t do that off the cuff” but in “a careful, methodical, well thought-out way,” said Glawe.
A federal stake in the artwork also needs to be clarified, added Glawe.
The closing date of July 2 gives the sides time to put together a specific agreement about the murals, he added.
Glawe stressed that Cenate – comprised of well-known, well-respected business and community leaders with strong and often multi-generational ties to both community and school – is primarily motivated by the goal of transitioning a beloved local landmark in a way that ensures it remains a living, viable community asset, a positive attribute to the community.
Some key questions asked and answered
Fielding a question that referred to “the small amount” being offered – $25,000 – money that would quickly return to Cenate in the shape of rent – Glawe noted that “there is more to it” than is immediately obvious.
There are reasons buyers are not knocking at the door, he noted. The building has acknowledged issues that carry risks, and it needs many updates.
“You do not want a buyer who would cannibalize the building for its copper and wood,” Glawe said. “The community does not want that.”
Glawe, with support from board members closely familiar with the lengthy negotiation process, also noted that the deal gives the school district an exit date – a chance to no longer be forced to split educational resources between programming for the students and the maintenance of a building that does not meet modern standards to function as a school.
The buyer and seller are “walking down the path together,” they are partners in this process, Glawe noted.
“Yes, you would help carry the cost – but you won’t have to fork out $70,000-plus anymore to operate the building,” he stated.
In addition, the district needs to invest $4.7 million (in 2007 prices) to address issues such as roofing or fire system updates, if it keeps to building. With the lease money, the district would not be spending any more than it currently is for the offices, in fact, slightly less.
With the performing arts supporters primarily interested in the auditorium, “the best-case scenario would have been to have developer for the apartment section lined up – but we don’t,” Glawe said.
Cenate stepped in after attempts to attract a developer proved unsuccessful.
“We are trying to do the legwork a developer would have to do – in hopes that, with the tax credits, a reputable developer will step up to the plate.”
Potential candidates exist, Glawe added. “They’ve said to us, [get the tax credits], then come to us,” he added.
Addressing a question about “strings attached” to historic tax credits, Glawe noted that Cenate is, indeed, aware of restrictions. The restrictions primarily concern preserving the facade and, to a lesser degree, the interior decor. (They should not derail Cenate’s ultimate goal.)
In response to yet another question, Glawe noted that Cenate is aware of asbestos issues and is purchasing the building “as is.”
“We have a relatively high tolerance level,” he added.
Task force report: facility planning leads to appeal for new high school
Facility Task Force members gave the board a detailed report on the process that eventually led to a recommendation to build a new high school.
The Task Force represented a wide cross-section of the community, with some 30-35 people from different walks of life and generations, said Task Force members who took turns making the report. The Task Force deliberated in large and small groups during four two-hour meetings.
The Task Force reviewed staff surveys on all programs and what was needed but not available; information of the current state of facilities; an architectural presentation of options to meet the needs for all programs; population trends and class sizes; tax impacts based on project size and the duration of a potential bond, etc.
Options included a multitude of configurations and ranged in price from $0 (a “do nothing” option) to $110 million (a complex with two new buildings).
The group was unanimous that “do nothing” was not a viable option.
After narrowing down and refining options and hearing updated costs, the group reached a consensus to “do it right” and “not use a band-aid approach” – to not pour money into aging buildings that would be near the end of their life-span by the time any potential bond is paid off. The Task force attempted to zero in on what makes most sense in the long run.
The group identified these priorities:
Upgrade facilities for safety at each site and around bus loading and unloading areas.
Update classrooms to meet modern space requirements.
Add physical education and athletic spaces.
Build a performing arts center.
Provide community education and community spaces.
Create new spaces for current and future programs.
Provide more room for pre-K programs.
While it did not even consider a new building as a serious option at first, gradually, as it studied matters deeper, the Task Force evolved into recommending a plan that calls for a new high school for grades 9-12, at a new, as-yet unidentified site. The new building itself, at 140,000 square feet, would cost $25.9 million. The land cost is budgeted at $1 million, with hopes the actual price would go lower after several sites are considered, and the district gains some bargaining power as a result.
In addition, under the plan, Jefferson Elementary would be remodeled as a school for grades 1-4, the High School as a middle school for grades 5-8, and Washington Elementary as a pre-school, kindergarten and community education site.
The remodeling includes shifting entrances and making them more secure, in part by placing administrative offices in key spots; making buildings age-appropriate to enable shifting the grades; knocking down some walls to enlarge classrooms; and some minimal additions.
Remodeling costs – plus soft costs for all projects – bring the overall cost of the plan to $45.3 million.
In some randomly selected examples, the anticipated tax increase as result of a 25-year, $45 million bond, is as follows: $63 a year for a home with a taxable market value of $100,000; $159 a year for a $200,000 home; and $5,221 for a $3 million commercial/industrial property.
According to the Task Force, the plan would:
Provide needed space for all pre-K programs.
Provide safe entry points at all sites.
Redirect bus and parent traffic.
Include a performing arts center for both school and community.
Provide badly needed PE and athletic space that can be used by the community.
Allow for future programming and growth.
Provide learning environments for the future.
As the board discussed the report, board member Steve Gag noted that the tax increase difference between this plan and the next best (a plan calling for a large addition on the current main campus) is $2-3 per month for an average house.
Board member Patricia Hoffman pointed out that society has transitioned from an industrial to a knowledge economy – while school facilities have not changed to reflect the new reality.
“I hope New Ulm recognizes the way education has changed,” she said. The new spaces would allow the district to redesign education to meet the needs of the 21st century in a way remodeled facilities could not.
After steps prescribed by the state (public reviews, etc.), and if legal requirements are met, the plan would lead to a referendum on the potential bond. The referendum will take place during the primary election this August.
The board was not unanimous in either of the votes. Board member Sharon Gieseke voted both against the sale of the older school and against the new high school option, citing fiscal responsibility and a mandate from tax payers.