The city of Ashland has approved a $2 million deal to acquire the Briscoe School property on North Main Street for uses yet to decided with funding it has yet to finalize.
The deal between Ashland School District, the city of Ashland and Ashland Parks and Recreation has been brewing for several months, after the district voted to divest its property that a board member said “won’t be a school again.”
According to the contract, the city will pay the district $1.54 million over 14 years for the “economic land” where the Briscoe building sits.
The parks department will pay $500,000 over 10 years and provide the district additional services in exchange for the open space behind the building — a deal still pending approval from the Ashland Parks and Recreation Commission.
City staff and councilors have cited a number of reasons to acquire the property due to its size, its proximity to downtown, the existing park on the property and the potential for development, which could include housing, at the site.
“It’s an easy ‘yes’ for me,” Councilor Rich Rosenthal said at the meeting. “What an unbelievable opportunity. How many cities can say that they own a whole city block near downtown? I’m very excited about this opportunity.”
But for the city, it wasn’t a slam dunk deal: City Attorney David Lohman said there’s a potential financial risk with the transaction.
It has planned to depend on rentals from a tenant, who has been at the Briscoe School over a decade, to cover the annual payment and a potential hefty maintenance bill of roughly $1.1 million over 14 years. But according to city staff, with the lease expiring in December 2019, “there’s no agreement” of an extended lease at this point.
‘A unique opportunity’
Ashland School District closed down Briscoe Elementary School in 2004 due to declining enrollment. The building has been rented out to Oregon Child Development Coalition and Lithia Arts Guild for the last several years, which reportedly netted the district $147,000 on average in 2017.
The city has eyed the site as a potential location for the new City Hall — an option that wasn’t popular with the council in November when it agreed to authorize a conceptual design process on three potential options.
At the Tuesday meeting, staff indicated that the site could be used for housing or other public use facilities, funded through different types of models.
“We need to own it before we decide what to do with it,” Councilor Dennis Slattery said. “Thank you staff for bringing forward such a unique opportunity. We would achieve something that is important and necessary by acquiring this land.”
The property, including an existing playground, an activities field and a 38,000-square-foot building, is appraised at $3 million, according to the district. It proposed to sell below market value — at $2 million — to the city and parks department to keep the property in public hands, school board member Jim Westrick said.
Councilor Mike Morris said he’s in favor of the deal “solely for the park there,” as he said he had grown up playing at the field on site. Under the contract, parks will continue maintaining the field and making it available to the public.
“Otherwise, hundreds of homes in the area will not have a park,” Rosenthal said.
A $1M maintenance price tag
Public Works Director Paula Brown said the aging building housing OCDC and other tenants is “not a great facility.”
A 2005 assessment, paid for by the school district, showed the Briscoe building, built in 1948 and renovated in 1997, has a number of issues, including a broken heating system, leaky roof and outdated electrical panels. It would have cost the district between $6 and $10 million in maintenance and repairs to reopen the school.
According to a city staff report, the city will spend roughly $1.1 million in maintenance, repairs and insurance fees over 14 years of its payment plan. That is in addition to its annual payment to the district, making the total expenditures on the city’s side of the deal at $2.6 million.
Staff expects maintenance will cost between $40,000 to $50,000 a year as time goes on, with the exception of 2018 at $25,000. It totals roughly $640,000. The roof repairs would cost $275,000. Boiler maintenance would cost $35,650. Insurance is at $80,000.
Brown also indicated that the bill would increase if the city chooses to make the facility more accessible to be in compliance with the Disability Act and to address plumbing and seismic issues.
“With that being said, the city is buying the property for the site, and not the building,” Brown said.
‘Operating on an assumption’
There’s a possibility that the city will be able to not only avoid using general funds to make the annual payments and pay maintenance fees, but also net $652,094 after the 14-year payment plan, “assuming that all conditions are the same,” said Mark Welch, the city’s finance director.
According to staff report, the city could collect as much as $3.3 million in rent throughout 14 years, under the assumption that OCDC and other tenants in the building would extend their leases until then.
The annual rent for OCDC ranges between $180,000 to $200,000; revenue from art wing rent is consisting at $40,000 a year, according to staff report.
“We are operating on an assumption that they will extend the lease, which is a key component of this deal,” Rosenthal said Thursday.
OCDC’s current lease ends in next year, and city staff confirms that there’s nothing in the contract would stop the organization from leaving.
“We have had some good conversations with them, but there’s nothing formal at this point,” Welch said, adding the city would have to go into its facility fund without the revenues coming from OCDC’s rent.
OCDC expressed an interest in acquiring the Briscoe School property itself, according to Lohman, who said the council needed to make a decision Tuesday night or it would have lost the offer. According to Ashland
Parks Director Michael Black, OCDC has also asked that parks allow its students to use the open space on site. The space will still be available to the public and open after hours, Black said.
The OCDC executive director and its Jackson County program director didn’t respond to phone calls from the Tidings Thursday.
According to Westrick, OCDC has been on site for 12 years and done a number of upgrades to the facility to accommodate the needs of its students. He said the district has been transparent with OCDC throughout its negotiation process with the city and parks department.
“They are our partner, and we wouldn’t do anything to hurt them,” Westrick said.
He declined to comment on whether OCDC would decide to extend its lease with the city, but said he’s confident in the city’s ability to hold up its end of the agreement.
“I wouldn’t have voted for it if I didn’t believe in the city,” Westrick said, as he called the purchase a “win-win-win” situation for the district, the city and parks department.
Rosenthal, who said at the meeting he doesn’t believe the property will be a financial burden to the city, indicated Thursday that the council has a strong belief OCDC would continue operating out of Briscoe School.
“If there was any weakness to believe OCDC won’t be there during the negotiation process, that would have influenced the council’s decision,” he said.
—Reach reporter Tran Nguyen at 541-776-4485 or firstname.lastname@example.org. Follow her on twitter @nguyenntrann.