Pearl Creek lease requires transparency by assembly
A June 18 special meeting of the borough assembly has been called by three assembly members to introduce and advance a proposal for a lease at less than market value with the proposed Pearl Creek charter school. Fairbanks resident and parent Sydney Mullen called my attention to this meeting and offered her analysis, printed below. I agree with her that the assembly members should clarify what they mean by “less than fair rental value.”
The assembly has also scheduled a special meeting on July 1 to hold a public hearing on the ordinance.
It is not clear from the ordinance if the plan is to lease the building for free, but the charter school would be required to pay annual maintenance fees, according to the text of the ordinance.
If advocates of the Pearl Creek lease want to respond, email me at dermotmcole@gmail.com.
By SYDNEY MULLEN
On Thursday, June 18 assembly members David Guttenberg, Kristan Kelly, and Tammie Wilson will present an ordinance authorizing a lease agreement with Pearl Creek STEAM Charter (PCSC) for the former Pearl Creek building at “less than fair rental value.”
They also seek to amend the borough’s budget by appropriating $268,000 for building maintenance.
Currently the amount of the lease is unknown. Will the public be included in this process? The question for assembly members and Fairbanks constituents is whether or not the proposed value of the lease makes the best use of public taxpayer money. Will the lease be a gross undervaluation of public assets, even when taking into account compelling public purpose or need, or will it match what other charter schools are being charged for their lease?
It should be noted that assembly member Guttenberg has a potential conflict of interest, as members of his family are major advocates of this proposal.
What does “less than fair rental value” mean when it comes to the lease of the former school building.
Again, that is not known because the proposed ordinance does not assign any dollar amount for the lease. The omission leads one to assume that the $268,000 appropriation for maintenance is, potentially, the only charge for which PCSC would be responsible. One wonders who would be responsible for other costs, like utilities and minor building repairs. Will the charter school pay $0 for electricity, heat, and water? – Will the borough subsidize the rest?
It might help to learn what other charter schools in the district are being charged, in order to see what might be fair for both the taxpayer and for the potential Pearl Creek STEAM Charter school.
Some charters lease from the Fairbanks North Star Borough School District:
Effie Kokrine Charter School (34,455 sq. ft.) is charged $8.33 per square foot, totaling $287,010 per year.
Two Rivers Charter School (20,208 sq. ft.) is slated to pay $7.14 per square foot for a total of $144,287 per year. This is a slight discount due to the charter’s small school multiplier, which provides a cost benefit for the school district.
Other charter schools leasing from private landlords:
Boreal Sun Charter school (23,682 sq. ft.) is charged $16.02 per square foot, which amounts to $379,500 per year.
Watershed Charter School (16,850 sq. ft.) is charged $22.67 per square foot, totaling $381,925 per year.
With all of this in mind, it would be logical for the borough to lease the former Pearl Creek building at a rate based on the charter school leases of other publicly owned buildings— $8.33 per square foot. The former Pearl Creek building is 62,982 square feet, hence the appropriate amount would be $524,640 annually.
If the $268,000 maintenance fee proposed in the borough ordinance is the only amount that PCSC is expected to pay, that would mean that the charter is paying a paltry $4.25 per square foot annually for the former school building— nearly half of what other charters in publicly owned buildings are being charged. If that were the case then the real costs of running the former Pearl Creek building would not be passed on to PCSC.
This potential deal to PCSC raises questions about fairness with respect to other charter schools currently operating in the school district. Was the former Pearl Creek building offered to other charter schools, like Boreal Sun or Watershed? Why is the former Pearl Creek building prioritized for lease over other recently closed school buildings, like Joy Elementary School?
While it is disappointing that the building is not put out to bid in a transparent process (as one might expect in leases of publicly owned buildings), the very least the borough should do is charge a realistic amount for the lease of the former Pearl Creek building to cover the costs of running and maintaining it.
How can the assembly responsibly approve an ordinance for a lease that has no dollar amount associated with it? Will the assembly vote on the final lease agreement? The lease agreement should state the proposed dollar amount or range, as well as clearly defining who is responsible for utilities. Because of the unique nature of this situation, the public must be given full transparency. The FNSB is not running a charity; they are stewards of public assets.
Sydney Mullen, who resides in Fairbanks, is a scientist, mother to three young children and an advocate for education.