District 191 Negotiating Potential Lease on Cedar School

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The Burnsville-Eagan-Savage School Board is considering a lease with Intermediate School District 917—a special education collective composed of nine member school districts located in Dakota County and southern Hennepin County. 

ISD 917 has put in an offer for half of the Burnsville-Eagan-Savage Learning Center, current location of the alternative high school and former home to Vale Education Center. . Since then, about half the building has sat empty.

BES is a member district, which means its own students attend programs in ISD 917.

"This is a tremendous opportunity," said Superintendent Randy Clegg during a board workshop on Thursday. "Instead of taking (students) to Farmington or Lakeville they can just go right there."

Currently, ISD 917 is operating out of storefronts and library space, a less than optimal situation. They hope to relocate to the Vale portion of BES' school right off Cedar Avenue/Highway 77.

The five-year lease would pertain to 21,629 square feet of facility, about 40 percent of the building. As of now, the agreed-upon rate is $9 per square foot, per year, with extra for operational charges. Executive Director of Business Services Lisa Rider said that's about $194,000 for base rent and $86,000 for operational costs. However, the unique relatonship between BES and ISD 917 would put the Board of Education in an odd financial position.

"We're a member district (of ISD 917) so we share the responsibility to pay part of the lease, but not we're also not able to levy our taxpayers because we are the landlord," Rider explained.

Because of that circumstance, BES will not make much money on the lease, though the arrangement will help defray 40 percent of their current operational costs at the learning center.

On a day-to-day basis, the collaboration won't change BES' instructional activity in this building.

Rider emphasized that the board would have to act quickly, since ISD 917 will have to extricate itself from current lease arrangements. However, there was some dissent on the board from Director Dan Luth, who objected on the ground that BES soon may have to consider closing some school buildings due to budget shortfalls. The school on Cedar would be a likely target, he said.

"I don't want to be locked into Cedar for five years because of this lease," Luth said. "I think this is the most vulnerable building we have in the district because of its odd configuration and location off of Highway 77. If we did try to sell a building, I would think it's our best chance."

Luth said he would prefer to include an exit clause in the lease.

Selling the building could be a tall order, even if the economy improves. Rider said that the district would have to find a purchaser who would agree to a price of at least $6 million to pay off the debt currently encumbering the building. 

Board Chair Ron Hill disagreed with Luth. He said an exit clause could kill an advantageous deal.

"Maybe we could rent the other half or maybe ISD 917 would buy it. In any case, this is almost $100,000 more than we would have gotten before," Hill said. "From my perspective it's a revenue steam we never would have had otherwise." 

The board will put the matter to a formal vote on May 17.