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8/3/2019 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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