An option for replacing school district offices

The Cleveland Heights-University Heights Board of Education building (BOE) was built in 1960. Due to increases in staff over the last half century—necessary to address the increasing complexity of complying with state mandates, as well as supporting a best-in-class educational system—the building’s office space (currently 31,903 square feet) is insufficient for the administrative staff currently employed by the district.

The district has made it work by housing some district staff in school buildings and the Delisle Options Center. As a result, district staff no longer works together at a centralized location.

The district has done a good job finding space, but the BOE, along with many other buildings in the district, is long overdue for significant upgrades. It is difficult to justify spending money on administrative office space ahead of student classrooms, but, currently, nearly every building in the district needs significant work.

Fortunately, there is an option for the BOE. Under Ohio Revised Code §3313.375 “Lease-purchase agreement for building or improvements to building,” the district can enter into a lease-purchase agreement for new administrative offices. The district can issue a request for proposal (RFP) for a lease-purchase agreement for administrative space that meets the district’s specifications. A developer will acquire the site—or the district can provide one—and design and build a new building that will fulfill the district’s needs.  At the end of the lease (typically 30 years), the title to the building will transfer to the district. (The district may be obligated to pay a lump sum at the end of the lease to pay for the property under the building.)

Because the district would be a tenant and not the building owner, the lease could require the developer to be responsible for maintenance and upkeep during the lease. This further frees up district resources to focus on the maintenance and upkeep of learning spaces.

The advantages to the district include: (1) freeing up maintenance expenses for district offices; (2) per the statute, the payments under the agreement are paid as current operating expenses and are not part of the net indebtedness of the district, thus not impairing the bonding capacity of the district; and (3) allowing the district to finance and update the school buildings at the same time as the district offices, without one forcing compromises on the other.