The Kalispell Public Schools Board of Trustees last week unanimously approved signing a letter of intent to lease a building at 1935 Third Ave. E. with the option to purchase to potentially relocate its central administration offices.

The district’s central office is currently located above ImagineIF Kalispell library on First Avenue East. The library is also looking to move out of the building, which is owned by the school district.

District officials are weighing consolidating other auxiliary services, programs and offices that are located around town to the new location. Those include the operations and maintenance department; the driver’s education, staff day care and HEART programs; Kalispell Education Foundation; employee health clinic; and Kalispell Education Association.

The lease would run for 15 years at $40,000 a month. Fifteen years is the maximum allowable lease term without prior taxpayer approval under state statutes.

Terms listed in the letter include a provision that rent will be raised by 2% per year over the course of the lease. Every month, $10,000 of rent would go toward the purchase price with the option to pay off the building available at any point during the lease.

The purchase price would be determined following a third-party appraisal. The school district cannot purchase a property above the appraised price.

The district is looking at leasing roughly 30,000 square feet of the approximately 36,000-square-foot split-level building owned by the Hollinger Family Limited Partnership, according to broker David Girardot of PureWest Real Estate. The building, situated on about 2.3 acres, is located south of town and across from Lions Memorial Park.

All occupancy costs, such as utilities, would be the landlord’s responsibility during the lease with the exception of telephone and internet services, according to the letter. The school district could remodel the space pending landlord approval.

Superintendent Micah Hill said during the Feb. 14 meeting that the current building went up in 1918 and was purchased by the district in 1966.

“As a district, we have been looking at potential new property for at least the last three years since I started as the superintendent,” Hill said.

In addition to the letter, administrators presented a list of pros and cons to trustees. Issues cited about the current building revolved around the lack of security, safety, accessibility, space, parking and storage of permanent and temporary staff, student and business records.

“The security audit we had literally gave the building we’re housed in an ‘F’ in part because there’s no egress, except for a single stairwell unless we’re out on the roof …,” Hill said. “The electrical, fire systems, just about everything, is in rough shape.”

The stairwell poses a particular problem to providing access to people with disabilities such as during school elections.

“We have a phone inside the door for people to call to get help … but you’ve got to go up three steps to get to the phone,” Hill said, emphasizing that accessibility has always been a challenge in the building.

Hill didn’t foresee repairing the building as a viable option.

“It’s a daily large chunk of space, but it’s also one that would be really expensive to remodel, something that the school district would probably not entertain any time soon,” Hill said.

If the district leases the Third Avenue East building, it could free up two other district-owned buildings on East Washington Street and Meridian Court, which the board could decide to sell.

Hill, when pressed on the combined value of all three buildings, said he could only speculate and put the figure at between $3 and $4 million

The terms of a lease agreement will be negotiated pending landlord approval to the basic provisions of the letter of intent. Any eventual deal would go back to the board for approval.

Prior to a board vote, trustees discussed the measure and took in public comment.

Trustee Lloyd Bondy advocated for the district to negotiate a percentage of the rent amount to go toward the purchase price rather than a flat $10,000 a month.

“So that as rent goes up, the amount goes up as well,” Bondy said.

During public comment, community member Shaun Pandina said making a decision with the limited information presented was “reckless,” and implored trustees to get more financial information prior to voting on a final lease agreement.

“Where's the cost analysis for anyone to make an important decision?” Pandina asked. “This board should be presented the analysis of the costs associated with the building being considered for consolidation as well as appraised values, so that they may make an informed decision instead of blindly trusting the pros and cons list that is not even labeled.

“I think 50% of the rent should be going towards the purchase,” he later added.

Pandina described the plan of leasing and potentially selling other buildings as essentially “painting taxpayers into a corner” with no alternative but to approve an eventual purchase.

Hill noted the district’s success in getting voter approval on land and property purchases.

“In part, because we don’t ask our taxpayers to pay more to do it,” Hill said. “We save money. We sell something; we do something that’s fiscally responsible for making that happen.”

While several trustees raised concerns about how the move to lease a building would affect the district’s ability to pass a levy, they ultimately agreed the Third Avenue East building provided more benefits to the community.

“This building provides a lot of opportunities that are not currently in our facilities,” Trustee Lance Isaak said.

“I feel it’s a lot less of a headache than trying to start something from scratch,” Trustee Ursula Wilde said.

Earlier in the discussion, Wilde asked if the school district included the library board in discussing the plans. Hill said he had not, but has discussed it with the library director.

During public comment, ImagineIF Libraries board Vice Chair David Ingram asked the district to keep the library board “in the loop” if the district decides to sell the building.

“It's been a long haul working through these things to try to position the district moving forward for certainly the best interest of our staff and students and communities. So appreciate that. Look forward to coming back to you with some more details and appraisal and all those numbers,” Hill said.

Reporter Hilary Matheson may be reached at 758-4431 or hmatheson@dailyinterlake.com.