001will need to capture which of the recommendations we want to fill in the blanks on that motion with. Um so without further ado, Mr. Nette, would you like to run us through our options? >> Yes. So most of this will be similar to what you saw last year on Miller Elementary. Um this the Deming facility. So, one of the first options um they're a little different order uh would be demolition and and say you know some of the pluses of that are that uh obviously it removes out of our square footage and our future uh maintenance repairs and and preserves the site for other development opportunities. However, um one of the things with this particular building is it has a historic designation. Um and you can see we've put down there little disclaimer on the
002bottom. uh to navigating regulation, federal and state regulations. Um they get uh the so the historic designation increases just the complexity of it makes it a lot more difficult. If we were going to demolish the building um and we could run up some against some other roadblocks, I think it would be hard to get support for funding for that purpose. A little bit more difficult than it would be for some of the other buildings. But and then next of course would be to repurpose it if we had a district uh um a district program that we had a need for. Um, one of the only programs we really have out there, and I don't know that we necessarily have a need for them, would be one of our behavioral programs such as ADT, EDT, or
003the Atanics um, to move that into that building. However, because it was a conditioning building, um, there'd be significant renovation costs and getting state funding would be uh would be difficult probably at best. And again, we don't have the major maintenance to maintain that building. So those are some of the things to consider for that. >> Mr. N, Madam Chair, I ask a question. >> So you just said I want to underline that in case I heard it right. Did you say that even if we continue to use it for for example for those programs or some other we don't have major manage to continue to maintain it? We I may have to defer J that but I for like when we repurpose another school we do not get um if we put a district
004program in there do we get any I don't I don't >> you know um madam chair um Tracy Clson though if we had a program within that building we've been receiving >> do you know can you explain or give us a little on why >> yeah so um the building is um what the school facilities calling offline. Um, so we no longer have an active school. There's a distinction between a school program within the state instruction and the department of education. The programs don't trigger the major maintenance funding piece. It has to have associated with it programs to report the kids back to school. >> Okay, thank you for that. >> Uh, one of the other options would be to sell or transfer uh ownership in that. So, if we were going to do that,
005obviously, um, one thing that does again is reduces our facility inventory, our long-term exposure, um, eliminates our ongoing operational and maintenance costs, and, uh, in that process of going through a sales transfer, um, we would we would get a market evaluation and appraisal on the building and then either sell it for fair market value or if there was a intergovernmental transfer, uh, what we would probably look at is something that was a transfer or trade for equal value of what the appraisal and assessment came up on. >> So um have you had anyone express interest in purchasing it or >> I have not had direct inquiries about it. I've had a couple um through principles of just the community asking what might >> Okay. that nobody know their government. >> So, um I know there
006was a direct request of could we make sure that it becomes uh you know sort of a community center shopping center area and you know I think generally the answer is we don't really have a whole lot of control over that. However, can we put a preference on this to we sell or is that allowed? >> Mr. Cigarelli, I don't mean to put you on the spot, but as I recall, you showed me some documentation that said um we have to choose based on the greatest value to the district was the language as I recall. Um can I put you on the spot and ask if I remember that correctly? >> Yeah. Um Trusty Aspen, that that's correct. um our court policies dictate that um we have to when we dispose of any personal or
007capital property that it's done in the best interest of the district. So um in that case just like when we go out to bid it has to be in the best financial the sole business >> and would I be also correct Mr. Cigarelli that in a bidding process we wouldn't even know what the prospective buyers they wouldn't be stating what they intend to use it for. It would just be a a bid financial bid to say we're interested in the property. So we may not even know what a prospective buyer would use it for at the point we go through the bid process. >> Yeah. Exactly. I don't think we have any details on what the the intended use of the facility is. Um now obviously when Intergovernmental transfer might be different if we're approached
008by another government. But as far as like a sealed bid or just using regular real estate market, we wouldn't have >> with the transfer of that or the sale of that property. I mean, whoever would purchase it like to go through the county or the city and get zoning changes and get approvals for a different use >> depending on on what their use is. Yes. once they purchase it, but they wouldn't have to do that until after they purchased it >> in the bid process. Is that a perfect due diligence? >> What do you mean by that? >> Well, where they check to see if they or do they place a bit? >> That would probably depend on someone says bit out, right? If it was designated on a certain bid date, they could look
009they'll look into as much as they want prior to that. But they couldn't get it completed, they would have to put in. >> Okay. >> And madam chair, um when we've disposed of school buildings in the past, we've um contracted with uh real estate agents and the the building market. So rather than have a seat, that's also business. There's a two blocks away. I don't think that >> and then the final final option I put in here um is is and this is always an option on is of course the mothball. However that um just delays your disposition if you had a purpose. And back to the options we just went over. If if we were looking at um another program to go in there, then then you would have to have that funding source
010available for that as well as the program that you'd plan on putting in there. So mothballing um is mostly kicking it down the road and we still have to maintain it. Um believe you and I were talking believe we have 10% major maintenance on a mothball building is for a limited time and duration of buildings that the state would allow us to do that. So that's generally used um if there's a strategic reason or you think >> and right now we don't have any. >> We do not >> would we have a use for it if we m them >> um when I'm not repurposing >> that's repurposed >> one. Yeah. So our behavioral programs for SJS said they're not funded to be in there. building's not funded and so I don't know that we
011necessarily have any reason at this time >> but with Mulling we couldn't do anything >> we could use it for storage or >> well you could use it for whatever the district chose to use it for um it's uh I don't know that we have a use for it right now um I don't have any intended use for it that I know of in the district and uh mothballing it would just delay that you know decision on what they're going to do for the disposal of the building. >> M I might I think there has to be a bonafide intent to reopen the building at some point that there has to be some justifiable reason the building brought back which I don't think is is part of the long-term facility. >> Correct. And I think
012with with it being a potent condition, they refused to fund it at one point. There will be no reason to fund it to take it out of that condition in the future. >> And if and if we do, sorry, if we do sell it, what happens with those funds? Because this is a pre990 that is. >> Sure. Um the work you've done with the reserve fund for the last few months um contemplates any proceeds from the sale of the 397 asset like a building to go into a special reserve fund and they would be segregated from our um school foundation dollars so that they could be utilized or build interest >> and then if we earn then we have to pay that interest to the state >> that that's correct at least for the time
013being u Actually, there's a quick update on that. I'm trying to stay on on topic, but the state superintendent has um issued guidance to retract that previous guidance. They're only going to um uh take 50% of general fund interest for the time being. >> Just thank you. >> So, if we were to say, let's sell this property, would it do a market analysis on it? I mean, we would wish aheads right away. >> I think that process was determined um probably by you guys whether or not we listed it with a real estate company or whether we put it up or sealed bid. Um that's how we do it and we would get determine the price by market analysis depend >> and we'd have to have that part of the policy or what we decide
014tonight. You have to say, "Okay, we're going to do a marketing analysis." >> I don't think you have to determine which option seller. >> Yeah. Who does the market analysis? >> Sorry. >> Who does the market analysis? >> Well, usually have to get a real estate company that's going to list it. That's what we'll do analysis. And I don't know that that's necessarily um necessary if we're going to get and I believe we have to get two appraisals on it. So we did the appraisal and that'll give us >> that is it those are only slides. I don't have a fancy clothing. >> And so could you give us your administrative opinion? I think because of um I I concur with Andy. I think mothballing, if we were to ever mothball a school, it's for
015different reasons than the ones that we've been contemplating. I think it's probably like a community that has a weird fluctuation in capacity where they don't need it, but we have a new influx of people coming and now we do need it. Um so I don't think it meets any sort of threshold to as he maybe described it kick the can down the road. Um I think demolition is um not a viable option. Um I think because of the issues of not receiving major maintenance and the cost to that we would incur to have to remedy all of the condition issues. Um it would be my recommendation to do the swell the cell transfer option. Um and then as far as the details of um how does that play out? That's a procedural detail to be
016worked out in another time. Um does it end up getting transferred by interest to a governmental entity or does it get sold on the open market? Um time will tell on that. But as far as um picking an option for tonight, um the administrative recommendation would be to do the cell transfer. Would there be any financial benefit to keeping it leasing it out and retaining tremendous >> well answer that financially but I think one of the problems is the money to re to bring the condition back up whatever purpose we're going cases for Um, but probably not mostly not in the business of leasing properties. Um, I don't know. You know, it'd have to be some type of triple net lease we've talked about where whoever was leasing it maintained it and took care of
017it. I don't know where the funding would come from to get it back up to that to that level of use until someone was willing to lease it from us, remodel it, renovate it, and maintain it. It's not in that condition. Maybe they've got a new boiler in case the water's hot. Um I think it it's on the condition statement our assessments with the state and has been and so you know according to them they're not going to fund it conditionwise. And I think it depends on the purpose because if an outside um group was going to purchase that, I don't know they would be set up for whatever their purpose was. So there could be a lot of a lot of renovation. You know, a a smaller school like that probably a renovation is
018is in the $15 million range just to leave it the same but renovate it, not to change anything on it. And once it's sold, they're I mean if people that buy it want to raise it, then that's >> Oh, they would have to jump through all that. >> I know, but I still can't you I mean it's a lot of work. It's a lot of work. Probably a lot of push back. Um so I don't know that stuff if they would choose that if they would just turn into something else. There any other questions for Mr. Nap? >> Give us a minute. >> The recommendation is that we sell our transfer show. >> That would be the administrative recommendation. >> Can we talk in this meeting about our thoughts on this? >> Okay. Thoughts, questions?
019I mean that to me that makes the most sense to sell it. Um, you know, we we can't use it for school. Um, so I don't know what else we would do with it. It seems like a lot of money to keep a smaller building that doesn't have much other purpose of it than the programs, which we don't have the money to do. So, to me, that makes the most sense. I wish I I agree. I wish we could choose who we sell it to. In the meantime, if it doesn't sell, we continue to maintain it. >> Yes. >> I think the biggest pause and concern that I have is what would the next people do with it? >> Right. But we don't have >> we don't have any over that. There's a lot of
020things as long as it's not a horse racing. I didn't even think about the horse racing thing. And like what Sarah said and you'd have to trust that because if it goes to the highest bidder, yeah, one agency might want to do like what Sarah said and make it something community and >> and is there what kind of zoning is it in now? But it's not >> right. It's not even res commercial. >> So it's in a residential section. >> I'm sorry. It's mixed. Um somebody property for a living the district >> you but I don't I I don't like the idea of selling it but I don't know what we would do with it or what I don't know that we have another option why but why do you think we don't because I
021think that there's is I would not want to talk. >> Well, and we have I mean we become our own developer and that doesn't either. >> Yeah, we I I think that a facility like that would interest if we put it out for sale. >> Um which is good. Um, I think property is typically even value of the land appreciates over time. Um, so when you have an asset like that, >> I mean, I I get that we're not willing to continue with funding to pay the bills on that asset, but it is an asset and property typically continue to appreciate >> because the district might need money somewhere down the road for something else. >> And if we can set this money aside and it is that correct, Mr. We can set the money
022from the sale aside and it can acrue interest and grow or it can >> I'm sure that's that's correct. Um >> it can um and future down the road uh the board could could choose to appropriate that appropriate that money for a specific purpose. Um but right now the default would be it would just >> consider it part. Then would that funding be limited on where future boards could put it >> and spend it? >> Um trusty B not necessarily. Um they would take formal action. Um your resolution earmarks any of those 397 assets to go into that corpus. So it would have to take a formal action, but I there's nothing that would encumber the word as far as how they direct those those resources. um will be maintained in a capital projects fund.
023So that's indicative of building facilities, land purchases, etc. >> Thank you. >> Due to it size, it wouldn't be one that you could turn another school into a building, you know, bridge or whatever. Just too small. >> It's too small. So our motion tonight would be should we just say the option number or is the motion to sell transfer >> option number approval. So the options move to approve. Option number three, >> I would say >> just say move to approve salership transfer. >> What's just leave it as option number three >> just transfer. Then of course at this point it will go forward like any motion that is >> brought forward second discussed. >> Um so during our meeting there may be a few people listening right now but >> think wise to have
024a conversation about this when it comes up. Yeah, I didn't realize you could transfer and so I think that might be good to >> speak for Andy and say he'd be happy to explain >> more options presented. >> Anybody else questions, comments? You will put it on the agenda. Speaking through it.