At a special meeting on Wednesday, the Alexandria School Board unanimously approved a purchase agreement that gives the district the potential to own a new building in the next several months.
Following a two-hour closed session, the board authorized an agreement with Turning Leaf Business Center, located at 1920 Turning Leaf Lane NW in Alexandria, off of County Highway 45 SW. Tastefully Simple is one of the tenants in the building.
The acquisition, described as a unique opportunity, still has a hurdle to clear. It is subject to approval by the Minnesota Department of Education during a process called “review and comment.” Should it be approved by MDE, the building is expected to be acquired in late March or early April.
The building acquisition is being explored because classroom space is maxed out at all six of the district elementary schools. Plans are to move the district office and Community Education offices out of Woodland Elementary School and convert that space into four additional classrooms. The area would also house special education services.
Terms call for the district to pay $9.75 million, with an annual payment of about $726,000, if it fully acquires the building. The facility is about 170,000 square feet and about 30 acres. Leasing a space in the building would have cost $651,000 annually for only 35,000 square feet.
The district was looking for at least 35,000 square feet. Prices to lease for the buildings it considered, including renovation costs, ranged from about $651,000 to $798,000 yearly.
Superintendent Julie Critz said the school district's intent was to lease space. However, costs to renovate a big box-shaped building into office space would have surpassed the costs to buy the TLBC, she said. Buying, rather than leasing, would also eliminate the possibility of another organization buying the building and displacing the district offices in years to come.
The district would occupy approximately 40% of the Turning Leaf Business Center in the first year, and about 50% the next year. The other space would be occupied by tenants, and those currently in the TLBC building would remain for as long as they wish.
Current lease income for that space is a little more than $1 million. The money from tenants would go to the school district to pay debt service.
“Once we realized the income of over a million dollars far offsets the cost of $726,000 of annual payments, it was very appealing for us to continue this discussion,” Critz said.
Providing the DOE allows the school district to lease a portion of the building, taxpayers would not see their tax statement change from the numbers given at the Truth in Taxation hearing last month, Critz said.
MDE approval is not a given. Board chairman Dean Anderson said after the meeting that an MDE representative implied during the closed session that the window is open for an acquisition of the building, but not very widely open.
Critz said the board knows what it’s asking for is unusual because most school districts do not get the opportunity to be a landlord. If the acquisition is declined by the MDE, the board will be looking at other options as soon as possible.
Anderson said the board is still hopeful. “If they (MDE) will honor local control and understand what’s good for our community, there’s a chance that we can get it approved,” he said.
“I like the idea of using a building that’s pre-existing versus having to spend money and resources on something new,” board treasurer Pam Carlson said. Other board members offered similar comments.
The Turning Leaf Business Center already has an internet connection, which was a major plus because that meant a fiber optic cable would not have to be installed, Anderson said.
“There were all kinds of snags that made the renovation costs increase,” he said of other building possibilities. “It really ended up being about the renovation costs that drove us to considering the lease at Turning Leaf.”
From there, the school board considered options for buying the building, which he said ended up being a better deal.
The school board had been discussing finding a new building for the last several months as a result of trying to reduce class sizes after the operating levy referendum was approved in November. Anderson said the board had been aware the TLBC was vacant since before the referendum passed, however it hadn’t risen to the top of the board’s list of potential spaces until the last few weeks.
The administration would be moving into the building with almost no renovation at all, Anderson said. Cubicles being used at Woodland Elementary are movable and would be transported to the new space. Since the TLBC has been office space in the past, renovations would be kept to a minimum. Conference rooms are also available.
Future plans may include renovating a gymnastics center and a few special education classrooms at the TLBC, Critz said.