VISD may buy part of Sheffield
April 26, 2008 · Updated 2:27 AM
By ERIC HORSTING
Vashon Island School District (VISD) may move soon to save a significant amount on general fund costs about $90,000 a year by buying into the J.T. Sheffield Building, where it now rents its district offices along with shared common space.
Such a purchase could make sense for the district, officials say, because buying a portion of the Sheffield would allow the district to pay its offices expense out of the capital fund instead of the general fund. The general fund, which was dangerously near to zero last summer, pays for teachers as well as maintenance and operations.
The general fund has also covered rent at Sheffield since 2004, when the district moved out of the environmentally dangerous old building on the corner of 204th and Vashon Highway, which it owned.
Sheffield, a former K2 warehouse located off of S.W. 188th Street, is owned by Vashon College and managed as a for-profit enterprise by businessman Tom Bangasser, former president of Vashon Chamber of Commerce. It also houses Vashon College, which Bangasser helped to found.
Sheffield was purchased for $325,000, the outstanding sum of the mortgage at the time, in 2003 through the nonprofit Vashon Island Rotary, of which Bangasser is a member. Now Bangasser, as the manager of Sheffield, is negotiating with the district about the possible purchase of about 30 percent of the building, at a cost of around $800,000. The number is an estimate at this point, all parties agree.
Bangasser said on Tuesday that the districts office space and the shared common area amount to about 6,600 square feet; the districts office space alone is about 2,950 square feet.
Acting Superintendent Terry Lindquist said hes under the impression that the $800,000 would buy the office space alone not the office space and common areas putting the cost at about $275 per square foot.
In an e-mail message Tuesday morning, Bangasser suggested $800,000 would pay for both office and common area space, putting the price per square foot at $121. Four years ago, before Bangasser made significant improvements to the building, the price per square foot was $36.
Should Lindquists assumption be correct, and the purchase price is $275 per square foot, that jump in just four years disturbed him.
Thats quite an appreciation. It does concern me, Lindquist said.
He added, I have no idea what the building was like when he bought it, but I know that hes put money into it, and its probably a much better building. I still think, though, that the $800,000 number is not a final one. We will have to negotiate all of that.
Asked whether he, too, thought that was a significant appreciation, Bangasser said that price per square foot was the wrong way to talk about the matter. He also noted that he offered the space to the district free of charge for the first nine months.
You are missing the money put in by loans, construction stuff, phone systems, real estate taxes, furniture, the rent-free nine months, Bangasser said.
Should the district decide to buy into the Sheffield Building, where the funds would come from is an issue still to be addressed.
It could come from a bond levy tied to an overall capital facilities plan now under way, according to board chair Bob Hennessey. The school board is considering putting a capital levy before voters in November.
District officials say they see some logic in pursuing the purchase, but at least one detail concerns Hennessey, Lindquist and board member Dan Chasan: the purchase would have a three-year limit that would allow the board to resell its share to Vashon College when the term is up.
That sounds good, but there is a risk, Chasan said. A buyback could happen, but what if Vashon College didnt have the money?
Hennessey agreed. I want to make sure that the district has something of value that can be sold on the market or back to Tom Bangasser when and if it decides to sell that.
He added, There is always a risk associated with buying a partial interest in a building like this, and also a risk any time you take on a partner.
Tom Bangasser has been very understanding of the districts problems and has given us this building free for a considerable length of time. Anything we can do to get our administrative office expenses off the general fund is good. We need to think what we can do in the long term. Do we stay in Sheffield for the next 20 years? Or do we look at other options?
The Sheffield purchase is one of five short-term options the board is considering as it works to figure out a long-term solution to its central office needs; also high on the list, according to Lindquist, is continuing to rent the Sheffield space until another long-term option is created.
Lindquist, in a memo to the board last week, recommended the offices remain in Sheffield for the next three years. Should the board be uncomfortable with a business arrangement (the possible purchase) with the Sheffield Building owners (Vashon College), then we simply assume the rent charge as the cost of doing business.
Other short-term solutions include using two vacant classrooms in Chautauqua Elementary School, yielding 1,880 square feet; a 2,850-square-foot portable with no storage space and a long permitting timeline; or high school building F, which would disrupt high school programs and entail a long permitting timeline, according to Lindquist. He does not support any of those options.
Lindquists memo also proposes possible long-term solutions to the districts office needs, casting them in light of the capital facilities planning process now underway and which is intended to rethink the entire campus and its three schools.
The list includes a buy-in at the K2 Building at $150 per square foot for about 8,000 square feet, enough to house all district functions; retrofitting the 7,500-square-foot high school band room (Building F) or the 4,700-square-foot Building K; or using the current main high school building A, which assumes the construction of a new high school.
Lindquist also mentions a possible five-to-10-year equity purchase of two floors (about 6,000 square feet) of the Sheffield Building, which would give the district enough time to decide if it will divide its student population into two schools with a different configuration of grades or three, as it currently does. If its two, said Lindquist, its possible McMurray could become the district offices building.
Staff writer Leslie Brown contributed to this story.