Public-private endeavor possible for new school

Public-private endeavor possible for new school

Just what can an increasingly cash-strapped city do when it needs three new elementary schools to the tune of roughly $20 million each and has no shortage of other expenses?

At least one option available to school leaders is sharing some of their prime real estate with the private sector in a partnership agreement, a concept they began exploring with more definition during a budget work session Tuesday night.

The proposal now being tossed around at the upper levels of Alexandria City Public Schools and in City Hall would be a way to replace the Jefferson-Houston elementary school in north Old Town with a new facility that incorporates a school, performing arts center, swimming pool, school and government office space and private real estate.

It’s an of-the-moment option for local governments around the country with construction needs and tight funds a growing club that, based on recent budgetary discussions, includes Alexandria.

On Tuesday night, Superintendent Morton Sherman introduced the plan as a “creative, fiscally responsible way of moving ahead to meet the needs of our children.”

Under such a partnership, a foundation of stakeholders would administer the site and find a developer to take on the risk of constructing the facility, according to the presentation given by Mike McShea of real estate firm C.B. Richard Ellis.

“This is a very desirable site in Alexandria,” McShea said. “It’s one of the best, if not just in Alexandria, perhaps in all of Washington, D.C.” and would be able to attract top regional and national developers.

The sort of agreement ACPS is considering typically limits the city’s immediate debt on new building projects by spreading it out over time, McShea said. The public lease agreement with the developer would be well below market rates and be used to directly finance the bonds required to undertake the project.

ACPS would never cede ownership of the land and could buy back the buildings from the private developer later for the remaining balance of the bonds, McShea said.

“I think this proposal … is different and not to chart a course but to hold down costs for the American taxpayers,” Sherman said.
At Jefferson-Houston, a school entering its 40th year of operation, the excitement and improvement brought by a new school building would be a welcome addition, principal Kimberley Graves said.

“This is just another move in the right direction [for the school],” Graves said. “To put money in a building that needs significant renovations is not smart during these fiscal times so this is a wonderful solution to help us get what we need for our school.”

Over the next two decades, an ACPS study has shown that more than $10 million will be needed to keep the existing structure usable. As is, Graves said the school’s design is dated, bearing more resemblance to a “bunker” than a modern school, and lacks natural light in many classrooms.

Enrollment projections and maintenance requirements point toward the need for three new ACPS elementary schools within the next four to six years, Sherman said.

School Board member Helen Morris, who lives directly across Cameron Street from the school, said neighbors would likely favor a new school but she also expects them to voice concerns about the height and density of any new construction.

“Largely, the community would support a new school on the site,” Morris said. “I think that it’s clear when you walk around the site that it needs to be upgraded, that its uses are limited right now and the community would love upgrades.”

In some instances, real estate tax revenue collected on private sector buildings can go towards paying off the costs of the public facilities, McShea said, softening the out-of-pocket blow to city taxpayers. Currently, ACPS pays more than $1 million a year in market-rate rent for its central office headquarters at Mark Center.

This particular public-private partnership was not a formal piece of the schools’ proposed construction budget through 2016, but a ballpark cost of about $21.5 million was offered for the school’s portion of the project, ACPS spokeswoman Amy Carlini confirmed Wednesday.