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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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