mlk board presentation
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Sale of Martin Luther King
Elementary School
School Board MeetingOctober 6, 2010
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History
School vacated in 2006
Site declared surplus School Board in 2007
City of Seattle School Department of
Neighborhoods approved allowing non-schooluse in summer 2009
RFP issued in August 2009, asking for offers
either to purchase or long term lease property Final Proposals received June 30, 2010
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School Board Procedure
Highest offer wins, unless one or more firms meetsrequirements for Youth Education Center or providingsocial services
School Board may select one or more proposals forspecial treatment, if:
At least 50% of building is used to support youtheducation, or
At least 50% of building is used for governmental orsocial services
Sole discretion of School Board
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School Board Procedure
Community use was deleted in 2008 by School Board asone of the methods to establish qualifications for specialtreatment, in order to focus on support to youth
education
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June 30, 2010 Proposals
First AME Church ($2.4 M)
Citizens for a Community Center@MLK ($2.5M)
Bush School
Purchase for $3.0 M
99 year lease at $150,000 annually = $5.7 million
Lease of 75% of site for $3.3 million
Central Area Dev. Association ($0.750 M for 1/3 ofsite)
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FAME Proposal
About 60% of the building is used for youtheducation activities
Rental rate for those areas is reduced to
$6/SF/yr, about 50%-80% of market value of $7-12/SF/yr
Value of support is roughly $50,000 to $80,000per year; most of the support ($32,000) is in the
form of free use of the gym area
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CCC@MLK
Roughly 50% of the building will be used for youthor social services
Rental rate is $10.40/SF, which is 85% to 150% of
$7-12/SF market rent At a maximum support level of $1.60/SF/yr, this is
at most $23,200 annually
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The Bush School
Purchase at $3,000,000 Lease at $150,000 annually; NPV = $5,638,401
Lease of 75% of site for $88,000 annually, NPV= $3,308,000
Promises about 1,000 hours of guaranteedpublic access annually to the soccer field, with avalue of about $20,000 to $30,000 annually
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CADA
Purchases only part of site (1/3)
Does not meet minimum price requirement: offeris for less than 1/3 the minimum cost
Proposes to use state funding for improvementsinstead of acquisition; this violates legislaturesbudget restrictions
Does not match with Bush lease - CADAproposes to keep both the gym and auditorium,which leaves inadequate room for a soccer field
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Purchase Price/Rent Payments
CCC@MLK: $2.5 M
FAME: $2.4 M
Bush Purchase $3.0 M Bush Lease $5 .7 M (NPV)
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Financial Analysis
Value of Support to Education and SocialServices
Annual value NPV
FAME $50-80,000 $1.25-2 M
CCC@MLK $23,000 $0.575 M
Bush (field use) $20,000 $0.500 M
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Staff Recommendation
Sell the property to First AME Church
The value of keeping the building available forsupport of youth education and social servicescreates an intangible benefit to the communitywhich outweighs the financial gain offered by thehigher priced proposal
First AME proposal offers more support than theCCC@MLK proposal
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Questions Raised
Will the property be needed for populationgrowth?
What role did possible use of the propertyas a community center, beyond supportof youth education and social services,play in the recommendation?
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Audit & Finance Committee
Recommended sale to First AME Church
Introduction to Board October 6
Board Action October 20 Closing about December 31
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Discussion
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