(Alexandria, MN) At a special board meeting Jan. 8, the Alexandria Public School Board approved entering into a purchase agreement with the Turning Leaf Business Center (TLBC) to serve as a new home for District Office (DO), Community Education (CE), and other services. The primary driver for the purchase was to free up space in Woodland Elementary School for more classrooms - enabling the district to accommodate projected enrollment growth and fulfill its referendum commitment to voters to maintain or reduce class sizes – with elementary class sizes being addressed first.
In looking at site options for relocation, district leadership studied many locations with the following considerations in mind:
● Overall cost and financial impact to the district,
● Support for the goal to maintain or reduce elementary class size,
● Opportunities to create efficiencies with staffing, programs, and spaces, and
● Facility size to accommodate both short and long term needs of the District.
The building, Turning Leaf Business Center, is located at 1920 Turning Leaf Lane SW, in Alexandria, and is known as the home of Tastefully Simple (TS). Tastefully Simple (TS) is a tenant of Turning Leaf Business Center, and will continue to be tenants, with the district as their landlords.
“This is a win-win for District 206, the tenants of Turning Leaf, and all the people in our community who will be able enjoy this beautiful facility. District 206 has visionary leaders-- just one reason Alexandria was recently voted the #1 town in Minnesota,” said Jill Blashack Strahan, Turning Leaf LLC owner. “Tastefully Simple has been a tenant of the Turning Leaf Business Center, and we are thrilled to continue to be tenants, with District 206 as our landlords. We will operate as we always have, occupying the same space, having the same beautiful entrance, and offering the same amazing products and services.”
Superintendent of Alexandria Public Schools, Julie Critz, talks in more detail about what went into the process of making this decision. (AUDIO BELOW)
While looking at cost modeling scenarios for lease vs. purchase, the Board determined that the most fiscally responsible use of taxpayer dollars is to purchase the facility rather than lease for these reasons:
• The annual cost to purchase was only slightly greater than the annual cost to lease, yet there was not the same opportunity for generating revenue.
• Several existing lease agreements are in place and will remain with the facility purchase providing the district with additional revenue. Per Minnesota Department of Education (MDE) guidelines, this lease revenue must be applied to debt service and cannot go into general operational funds.
• The facility meets district short and long-term needs to relocate DO & CE to make more space for kids and save the district from continued and future lease payments at other locations.
“This purchase is a win-win on many fronts - for our students, our district and our community,” said Julie Critz, Superintendent. “It will not only provide us with more space for our growing enrollment, but it’s a smart financial move for us and for our taxpayers because it would cost less than leasing or adding on to an existing facility.”
Critz says the Board looked carefully at cost modeling scenarios to accommodate the necessary 35,000 square feet they say they need in order to create more space for elementary classrooms, create space for center based special education programs that currently are located in a leased building and create space for the gymnastics program that is currently located in a leased building. Here were some of the options that were considered:
• Add classrooms on an existing building; 35,000 (sq. ft.) at $310 per square foot = $10.85 Million
• Explored leasing space at three locations (cost includes renovation of the lease space) - annual prices ranged from $651,000 to $797,500
• Purchase TLBC at price of $9.75 million. Annual payments of $726,539
- District to utilize a portion of the building
- Maintain current leases for income of greater than $1 million dollars annually. This income would be applied to the annual payments to purchase.
In the end, Critz says the purchase offered a better deal because it would cost less than leasing or adding on to an existing facility. "We are thrilled that this will help us fulfill our commitment to lower class size in a fiscally responsible manner."
The agreed upon purchase price for the 170,000 square foot building is $9,750,000, which includes a significant amount of personal property (i.e., snow removal equipment, office furniture). The building sits on a 30-acre site. The district will be able to offset its building payments with the existing lease payments from building tenants - offering a better financial deal long-term for the district rather than to continue leasing the space it needs for the District Office, Community Education, and other services.
“We know that what we are asking for is unique but we also believe it offers great opportunity,” stated Critz. “We are hopeful that MDE will consider our local circumstances and that it reflects a common sense approach for our taxpayers.”
The purchase of this property is contingent upon MDE approving the facility plan through a review and comment submission process – typically a 60-90 day timeline. If approved, district staff would likely move out of Woodland Elementary in May 2020, freeing up space to add additional classrooms for fall 2020.