Pleasanton Unified Finalizes Terms of $23.48 Million Office Purchase to Relocate District Headquarters | New
The Pleasanton School Board approved the final plan to purchase an office complex in the Hacienda Business Park to serve as the district’s new headquarters Thursday night.
The two-building property, located at 5758 and 5794 West Las Positas Blvd., will cost the Pleasanton Unified School District $23,480,261 to acquire from current owner, ECI Four Arroyo LLC. The board of directors voted 4 to 1 to ratify two amendments to the final agreement and move the relocation project forward, with director Kelly Mokashi dissenting.
According to PUSD staff, three acres of the current district headquarters on the outskirts of downtown Pleasanton at 4645 and 4665 Bernal Ave. will be retained while the remaining seven acres will be put up for sale. The property was recently estimated to be worth between $31 million and $34 million, which would help pay off the newly purchased Arroyo Center.
“This is a critical first step that will allow the district to leverage some of our current ownership to help fund needed investments in our aging school facilities,” Superintendent David Haglund said at the meeting. . “By maintaining part of the Bernal property, we will pave the way for significant improvements to our facilities at the village secondary school and create dedicated space for the growing Pleasanton Virtual Academy.”
Ahmad Sheikholeslami, deputy superintendent of business services, said the district had been discussing the need for a new district office for years and the pandemic had given staff the chance to start looking due to falling prices. commercial in the market at the time.
Rather than spending money to renovate and update the current head office site, which would cost more, Sheikholeslami said the best course of action was to take advantage of the prime real estate market and use current ownership as financial leverage.
Following council’s initial approval of the agreement to purchase and sell the new property on May 12, the district received an updated lease agreement for the sole tenant currently leasing part of the Arroyo Center, the electron microscopy company Gatan Inc. — which would make the district the landlord of the lease going forward after the escrow closes on the purchase.
The district plans to use a $30 million equity certificate, which is a type of financing where an investor buys a share of a program’s rental revenue, and future payments from tenants to pay for the space and everything. future renovation and construction project. .
The company will start paying the district about $80,000 from next year every month until 2027, which Sheikholeslami said would bring even more revenue to the district’s general fund.
“It’s one of the most fiscally responsible decisions I’ve ever made on this board because what it does is it takes the assets we have and transforms them. in dollars that we spend improving our facilities throughout the district that we don’t have to pay with general fund dollars,” said administrator Joan Laursen.
The council also considered two amendments to the rental agreement on Thursday evening.
The first identified that the seller entered into a lease extension, removed the current tenant’s option to extend the seven-year lease, and agreed to complete tenant improvements worth approximately $500,000.
According to the district’s report, the agreement was intended to ensure that the district will not have to pay any costs resulting from the correction of violations in any existing building under the Americans with Disabilities Act, among other amendments.
The second amendment includes a letter from ECI Four Arroyo LLC outlining approved plans for improvements and modifications that will be made to the building.
It also includes a $100,000 reduction in the purchase price following negotiations between District officials and the seller resulting from findings made by the District during its due diligence investigations.
According to Arroyo’s property inspection and financial report, which contains information on the survey, tenant improvement planning and costs, property and land use and financial information, the building is generally in good condition but has some heating and air conditioning units that need to be replaced, as well as the roof of the building which has reached “the end of its useful life and should be replaced within two years”.
In addition to reviewing these new amendments, the board discussed plans for Early Years, Horizon and STEAM programs, as well as Village High School, Pleasanton Virtual Academy and adult transition programs – which are currently operating on the district’s Bernal property.
While Village and Virtual Academy will remain on the Bernal site’s three acres and be renovated, Horizon and STEAM will move to Harvest Park Middle School.
Both of these plans are included in the Facilities Master Plan which depends on the bond the council has written to secure the November election ballot. This bond must first be passed later this month and then delivered to the office of the Alameda County Registrar of Electors and the Clerk of the County Board of Supervisors. The election for the bond would be part of the statewide election to be held Nov. 8.
This uncertainty over whether or not voters will adopt the bond to fund the master plan is something that led Mokashi to disagree with the purchase, with the acquisition effectively being contingent on the sale of the property. Bernard.
“Yeah, I’m being asked to support, you know, the buying of the sell, but at the same time how we pay it depends on that sell and that sell and I hadn’t even necessarily decided whether I would feel comfortable representing and saying that we should sell these properties,” Mokashi said.
But board chairman Mark Miller said it was a risk worth taking.
“I think about it this way: would we still be doing this if we weren’t going out for bail? And in my mind, yes, we would,” he said.
Arroyo’s inspection and financial report also included back-up plans in the event the bond didn’t pass, including funds from the sale of one of his properties and possibly tapping into the Sycamore fund. , which stemmed from the sale of the property on Sycamore Road in the late ’80s.
Now, the next steps the staff will take will be to review and finalize the inspection and financing reports, launch the certificate of sale of interest and review the architectural services to make improvements.
Sheikholeslami said it would likely take seven to eight months after plans were received and tenant improvements completed until offices could start moving into the new space.