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District 88 closer to selling former middle school

Sale could happen as soon as Dec. 20; senior housing planned

November 29, 2012
By Kremena Spengler - Staff Writer , The Journal

NEW ULM - The District 88 Board of Education this week moved closer to selling the former middle school, by scheduling a closed board meeting Dec. 6 to review a purchase agreement proposal from Eagle Development, LLC.

Closed meetings in such circumstances are allowed under state law.

The potential sale has been subject to an on-and-off discussion by the board's Facility Team since last spring. The team considered the proposed agreement in detail Nov. 16. Several changes were discussed based on input from a school attorney, and the attorney was directed to provide a revised copy to Eagle Development.

The Facility Team also discussed progress on the review of various options for facility spaces (to replace spaces now used in the former school) if the sale becomes final. More specifically, it reviewed an analysis of the possibility for building a facility on school property on Payne Street (near the main campus).

The district owns a house on Payne Street next to the staff parking lot. The district asked I&S Engineering for a rough estimate of what the cost would be to remove that house and build a new structure on the site that could be used for administrative purposes or an early learning site. "The option would cost more than the district wants to invest at this time, but we had to know what the potential cost of such an option would be," explained Superintendent Harold Remme upon request.

I&S Engineering prepared three alternatives for future board consideration.

The matter of the sale of the middle school has now advanced to a stage of where it needs to be considered by the whole board, Remme said. He projected that an agreement could be ready for approval at the regular school board meeting Dec. 20.

Recent history

The school district advertised the former school for sale last spring and received four bids.

Eagle Development, LLC, the highest bidder, offered $100,000. The group proposed to turn the building into senior housing, offering to rent the auditorium in the former school to the district for $1 a year for 10 years. The transaction would be contingent upon securing financing for the senior housing project, bid documents said.

The other three bids were: the Minnesota Housing Partnership, $50,000, proposing apartments and an arts center, with the auditorium managed by the NUACT local actors' group; Skillings Properties, $25,000, with an offer similar to the Minnesota Housing Partnership's but with different specifics; and George and Gayle Properties, of Missouri, $10,000, which quickly withdrew the bid.

Under the bid proposals, some parts of the building (some later additions) would be razed.

The district chose to begin work with Eagle Development to develop a purchase agreement.

Superintendent Harold Remme at that stage called on the board to seek clear answers to the following questions: when will the transfer be possible; will the district be able to use office space, the board room, storage space, the auditorium, locker rooms and shop rooms and at what rental rates; and who will be responsible for maintenance, insurance, scheduling of spaces, etc., once the title is transferred.

Clarification was also deemed necessary on maintaining the value of the historic murals in the auditorium; what is included in the purchase (for example, unused property inside the building); advance notice terms when vacating the property, etc.

The district would need to use the auditorium on a priority basis for an extended period of time and would require time to prepare alternate space, Remme reminded the board then.

"Prior to the transfer, the district must have some assurance that the buyer has an adequate financing plan to complete the proposed renovation and meet property tax obligations," said Remme. "The district has a responsibility to tax payers for the sale to produce a viable entity that enhances the community."

More about the property; reasons for seeking a sale

The former senior high, junior high and middle school is a 120,000-plus-square-foot building at 15 N. State Street.

The original building was constructed in 1915. Classrooms and an auditorium were added in 1938. More classrooms were added in 1955.

The building was last used as a school for grades seven and eight in 2006-2007. After that school year, as a result of declining enrollment, seventh- and eighth-graders were moved into the high school on South Payne Street.

The facility currently houses the office of the superintendent, the Business Office, the Community Education Office, the office of the buildings and grounds director and the Food Service Office.

The former school's auditorium serves as a venue for school concerts, plays and musicals, community concerts, practice and game space for volleyball and basketball, and a site for award programs and staff training.

The district rents out rooms to the Suzuki Music School, Rolling Thunder Wrestling and other groups.

The building also hosts some community education classes and serves as an early childhood screening site.

It provides storage space for unused materials and equipment, including props for plays and musicals.

The district placed the building for sale because of its high maintenance costs. According to a fact sheet supplied to bidders, utility costs ran in the range of $80,000 to $90,000 a year in the last few years of full operation, and at approximately half as much since. Eighty-five percent of the building is heated by city steam and has no air conditioning.

Another reason for placing the building for sale is that, overall, only 20 percent of the building is now in use.

If the school is not sold, the district would potentially need to consider investing in maintenance: including roofing, electrical, plumbing and tuck-pointing work, fire protection and accessibility upgrades.



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