As part of a plan to raise revenue for a cash-strapped district, Redwood City Elementary School District officials approved leasing former campuses vacated when schools were shuttered last year.
The board unanimously agreed to lease the former Hawes Elementary School campus to three early learning providers, while voting 4-1, with Trustee Alisa MacAvoy dissenting, to lease the former Adelante Elementary School to the Stratford School. Officials previously agreed to lease the former Orion Elementary School campus to Creative Learning Center.
The decision Wednesday, Oct. 16, marks a culmination of a process initiated last year when officials agreed to close and consolidate campuses in hopes of overhauling a busted budget which faces a $10 million deficit. The combined leases will generate about $3.1 million a year.
Yet despite the months spent deliberating over the potential benefits and costs associated with the school system’s transformation, board President Dennis McBride said the process remained challenging.
“It was hard,” said McBride, noting the dissenting opinions and high emotions surrounding the issue.
Regarding the arrangement with Stratford School, MacAvoy questioned the wisdom of renting a former campus to a direct competitor which could lure away students from the district, while offering limited community benefit.
“I voted no because I wanted more time to find tenants that not only would provide much-needed revenue to our school district but also provide a community benefit like after-school care, infant/toddler care and/or preschool,” MacAvoy said in an email. “And, I do not believe we need another private school in our city that potentially takes away from public school support.”
She balanced that perspective by noting she supported the decision of her colleagues, who ultimately determined the offer from Stratford School was too lucrative to pass up.
Under terms of the proposal, the school offered to pay the district more than $1.404 million annually over a 10-year period which officials project could ultimately generate roughly $15 million, according to a district report.
While recognizing the concerns raised by MacAvoy and others, McBride said the district is not in a position to turn down such an offer.
“We still need the money,” he said.
McBride also questioned whether the private school would pose a financial threat to the district, suggesting most families inclined to enroll their students in a private school have already done so.
“I feel like the parents that have the money to go to Stratford have already left,” he said.
Enrollment is a key financial issue Redwood City schools, because the district relies on state funding according to average daily attendance for most operational financing, rather than local property taxes.
As due diligence, Superintendent John Baker examined whether the establishment of Stratford School sites in other local communities led to an exodus of students, said McBride. He found the school’s opening in San Bruno or Sunnyvale drew some students away, but still far fewer than the amount which would offset the financial benefits of a property deal with the district, said McBride.
As further protection for the district, officials agreed Redwood City can reclaim the leased campuses any time in the next 18 months, said McBride. Stratford School officials also agreed to a comprehensive traffic control plan around the site, to alleviate the concerns of some neighbors.
Regarding the former Hawes site at 909 Roosevelt Ave., officials agreed to a 10-year lease with early education providers Kidz Konnect, Building Kidz and L’Academy. The assumed annual revenue is $1.2 million collectively, which could generate $12 million over the term of the lease, according to the report. The district’s preschool will remain at the site, under the arrangement, and Touchstone, a program for dyslexic students, will sublease some space there too.
Officials also examined an alternative proposal to allow a handful of different providers lease the former Hawes site, but the financial terms were significantly less lucrative according to the report showing the district could expect to receive roughly $5 million over the length of the lease.
The previous deal to allow Creative Learning Center, a preschool for students with autism and developmental disorders, to lease the former Orion campus stands to generate about $4 million over the course of a seven-year agreement.
Under an earlier agreement, officials also agreed to consolidate charter schools Kipp Excelencia and Connect on the former Fair Oaks school, which was merged with Taft Elementary School during the district reconfiguration last year. The district does not stand to gain financially from the agreement though, because charters pay a lower rent amount set by the state of approximately 10% market value.
For the former Hawes site, MacAvoy shared her appreciation for the opportunity to benefit the community.
“We unanimously approved a package of tenants that will provide infant/toddler care and preschools and some subsidies for low income and a small learning center serving severely to profoundly dyslexic students 6 to 11 years old,” she said.
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Note to readers: This story has been changed to reflect that charters do pay rent at about 10% market rate.