Cook County Independent School District 166 and the city of Grand Marais have reached agreement on many of the issues regarding the construction of a community center—the Cook County Family YMCA—attached to the school building. The parties involved continue to work out the details, but this is what the new facility could look like.
When representatives of School District 166 and Cook County met last week to negotiate the lease or sale of the west wing of the school building for the construction of the Cook County Family YMCA, the two entities seemed far from agreement. However, on Tuesday, September 25, the two government bodies found common ground and shook hands on the deal.
School board had doubts
However, the matter was still up in the air just days before at the school board meeting on September 20. The school board considered the appraisal completed by Dawn Cole of Cole Appraisal and Consulting, Eveleth. (No relation to the county’s consultant, Wade Cole of ORB Management.) The appraisal valued the building and the .98 acres of land around it at $160,000, or about $7/square foot.
Board member Deb White said she thought $7/square foot was too little. “What we have here is real estate that we’re using,” she said. “Our building is not in danger of falling down.”
Superintendent Beth Schwarz said she has contacted another appraiser to ask his opinion on the first appraisal.
School board member Terry Collins said they should consider how much the district would have to pay to rehab or tear down the west wing.
If the community center were not attached to the school, school board member Leonard Sobanja said, they could rehab the west wing and use it to expand the industrial arts program. He thought the community might support taking out a bond to do that. Technical jobs pay well and are going to be plentiful, he said. He didn’t know how selling the west wing for $160,000 would benefit the school.
White suggested approaching the Iron Range Resource and Rehabilitation Board for funding to rehab the building and use it for a “small business incubation program” that students could be involved in.
Sobanja said in the 50 years he has lived in this community, he has seen building projects get downsized in order to reduce costs and then more money spent later to meet the needs that were not met because the buildings were downsized. He recommended that the county pay what it needs to pay now to get what the community really needs.
ORB Consultant Wade Cole said an expensive firewall between the school building and the community center will be unnecessary if the school retains ownership of the land underneath the new facility. An analysis is being conducted to determine how to fairly split heating costs if the current boiler system serves both entities. Superintendent Schwarz said electricity and water/sewer would be metered separately.
Reconsidering appraisal and capital costs
All of those questions were discussed again at the September 25 negotiations meeting, attended by School Board members Sobanja and Jeanne Anderson; Superintendent Schwarz; County Commissioners Fritz Sobanja and Sue Hakes; Community Center Director Diane Booth and a handful of community members.
Superintendent Schwarz reported on her conversation with John Vigen of Ramsland & Vigen, Inc. She said the school did not seek a full appraisal, but she said it was felt that a second opinion would be a good idea. Vigen was coming to Grand Marais for another matter, so Schwarz said he agreed to do a walkthrough at the school and to review the appraisal done by Cole Appraisal. She said he looked at some additional property comparisons and he arrived at an average square price per foot of $6.66, for a total of $156,749. “If you round that up, it comes to $160,000,” said Schwarz.
Commissioner Hakes noted that the Vigen opinion was not that far off. “That is great,” she said.
Schwarz then distributed a handout with 2 – 3 year capital plans with anticipated financial impact to ISD 166 with— and without—the Cook County Family YMCA. Schwarz’s table unfortunately shows an eventual deficit for the school district with or without the attachment of the community center.
On page one, showing the capital plan with the community center, the school receives $160,000 for sale or lease of the building and sees savings from not having to rehab the west wing and for ongoing utility and maintenance costs. At the end of fiscal year 2015, the estimated deficit for the school was $168,628.
The first capital plan included constructing an industrial arts expansion on the north side of the school building at an estimate of $450,000. The plan also includes $175,000 in possible grant funding, which the school could obtain by using the $160,000 from the county to leverage.
Community Center Director Diane Booth said she would assist the school district in seeking those grants. She said she had already had some positive discussion with possible granting agencies, however, she cautioned, “It is easier to get funding for programming. Bricks and mortar is tough, but I think we can get something.”
There was discussion of several potential grant pieces and Booth said if the industrial arts area could be open to classes for Cook County Higher Education that could lead to other grant opportunities.
On the second page of the handout was a capital plan worksheet without the community center, which showed the school covering all the costs of rehabbing the west wing and for the industrial arts expansion, without the $160,000 from the county for the sale or lease of the west end of the building. The projected deficit in fiscal year 2015 on that page was $847,934.
Back to the negotiation table
The negotiators took a break again, primarily for the school board representatives to consider the new information. When they returned, Superintendent Schwarz said ISD 166 could agree to a purchase price of $166,000 and a 99-year lease at $1 per year.
She added that the school would agree to that price with the understanding that the county would pay 20 percent of the cost associated with the district’s boiler repair, maintenance and replacement over the next 99 years. Schwarz said the area to be used by the community center is 20 percent of the facility.
Schwarz noted that the school district is currently renting space to the Minnesota Department of Natural Resources while its building is under construction. The DNR is paying the school district $2,557.50/month for use of the former administrative office. Schwarz said the school wants to keep that lease intact during the duration of the DNR’s stay and would be responsible for heating and cleaning that space.
Finally, Schwarz proposed that ISD 166 use its health and safety funds to remove the asbestos flooring from the gymnasium.
Commissioner Hakes reviewed the school’s revised proposal and grinned. She said, “That is the same thing we talked about.”
Commissioner Sobanja said, “It’s looking good.”
Heads nodded and Schwarz said, “What the school needs is a written agreement.”
Hakes said as the buyer, the county would see that an agreement is developed and given to the school so its attorney can also review it. Hakes agreed to have the agreement ready for the next school board meeting.
Jane Howard also contributed to this report.
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