By Sarah Campbell
scampbell@salisburypost.com
The Rowan-Salisbury Board of Education is ready to takes its plan for a consolidated central office to Rowan County commissioners.
That’s after a meeting in which Local Government Commission officials questioned the developer’s ability to secure $1.5 million in tax credits and asked the district to look into conventional financing options.
The school system held off on sending the lease/purchase proposal to commissioners in September because it wanted to receive a nod from the Local Government Commission and determine the viability of New Market Tax Credits, which would knock the cost of the more than $8.6 million building down to about $6.9 million
But it turns out the Local Government Commission can’t gives its stamp of approval until commissioners sign off on the project and the design is complete.
“We thought we were ready to get approval from the LGC so that we could go to the county commissioners,” Gene Miller, assistant superintendent of operations, said during Monday’s school board meeting. “But we were told we were putting the cart before the horse.”
Miller said the project’s developer Bryan Barwick, who has a history of landing the tax credits, has assured the district and the Local Government Commission of his ability to receive the tax break.
Miller has also drafted an alternative to the lease/purchase agreement. It calls for the county to borrow the money at an interest rate of between 3 percent and 3.5 percent.
He said if the county secured an interest rate of 3 percent, the school system could feasibly break even without the tax credits.
Another option, Miller said, would be for the county to loan the district the money for the central office out of its fund balance and tack on 3 percent interest.
Miller also addressed how the district would pay for the building, which will likely end up costing roughly $9.5 million with interest.
The school system could save operating costs in excess of $4.4 million over a 10-year span by consolidating its five administrative offices. That would eliminate additional rent and duplicated services such as utilities, Internet, cleaning and clerical.
It would also eliminate maintenance costs to the facilities. The district anticipates having to shell out about $3.2 million in repairs and upgrades to the Long and Ellis street administrative offices within the next decade.
“We would have to spend $7.6 million between now and 2021. That’s almost enough to pay for a new building,” Miller said.
The district will also have access to sales tax money for capital projects after it finishes paying off bond debt in 2015-16. That will free up at least $1 million a year to put toward the new building in downtown Salisbury, Miller said.
Miller is hoping to present the options for the 62,000 square-foot office to commissioners next month.
But there could be another hitch.
School board chairman Dr. Jim Emerson pointed out the project hinges upon the city of Salisbury’s donating the land, which is worth an estimated $200,000.
The school system has yet to receive any formal commitment from the city to provide the land.
The district will take the proposal to Salisbury City Council if approved by county commissioners.
Contact reporter Sarah Campbell at 704-797-7683.
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