The Niskayuna Central School District is seeking voter approval on March 14 to spend $3.2 million to purchase the property it currently leases for its transportation facility.
The district has been leasing the space in the Hillside Commerce Park at 1301 Hillside Ave. for about two decades. Matt Bourgeois, assistant superintendent for business, said school officials believe it would be more cost effective to own the facility outright.
Niskayuna school officials would pay $420,000 in a lease payment to Hillside Venture LLC in the 2013-2014 year, but pay $284,000 in principal and interest if the district purchased the building.
The lease payments will continue to rise, Bourgeois added, as the district’s agreement contains a clause that increases the lease payment by 5 percent annually. The district could take out a 15-year bond to buy the facility. Leasing the property over that same time would cost about $4.7 million, according to Bourgeois. The cost of leasing over the next 15 years would be nearly $9.1 million compared with nearly $4.3 million to own it.
When it takes over ownership, the district would collect rents from cellphone companies on the vacant water tower that sits on the property as well as from Ellis Medicine, which is leasing an adjacent parking lot. Bourgeois estimated that the contracts would generate about $150,000 in revenue.
“Essentially, we can own the property for less than half of what the lease cost would be over that same period,” he said. “We see this as a great opportunity for us to be more efficient in containing costs of the district and the potential to generate new revenue.”
The land is lnear where the federal government is building a 60,000-square-foot Army Reserve Center training facility to replace one elsewhere on the government site.
Buying the property would take it off the tax rolls and cause a drop of $70,000 in tax revenue, but Bourgeois said the rental income offsets that.
Bourgeois added that there is the potential for other districts to partner with Niskayuna, as the district occupies about two-thirds to three-quarters of the space. Niskayuna school officials also store maintenance equipment and supplies such as paper, according to Bourgeois.
Niskayuna would have an additional cost to maintain the facility because now the landlord takes care of that. Bourgeois couldn’t provide the exact figures. There would also be increased utility costs because the district currently pays energy bills on the space it uses.
The Niskayuna Central School District uses two buildings to park buses and also houses its operations and maintenance facility there. Bourgeois said the arrangement has worked out well. The buildings have high bays and high ceilings and overhead doors on each side of them, which make it easier for the buses to pull straight through and not have to try to back up and turn around, according to Bourgeois. There are loading docks that make it easy to deliver supplies.
The Board of Education on Tuesday set the referendum vote for March 14 from 7 a.m. to 9 p.m. at Niskayuna High School.
District officials had originally suggest having the vote for a shorter period of time, but board members extended the hours to make it consistent with other budget votes.
Board Vice President Deb Gordon said the district has to get the word out about how this purchase will help the finances.
“I’m sure we’re going to get some questions from the community about a big purchase like this in dire budget items,” he said.
School officials will inform the community of the project in a variety ways, including email newsletters, the website and at PTO meetings.
“I think it’s a good way to remind the PTO of the ways we’re trying to save costs in the overall budget,” said board member Robert Winchester.