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County Trustees Approve Building Purchase for County Office of Education
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County Trustees Approve Building Purchase for County Office of Education
Despite Millions in Additional Costs for Repairs, Narrow Margin Moves Project Ahead
By Michael Thomas
Over the next 18 months, the County Office of Education will be pulling up its roots in Capitola and moving to Santa Cruz’ Harvey West industrial area. At an Apr. 19 meeting, the County Board of Education approved buying the building at 400 Encinal from local real estate investor George Ow Jr. for $7 million, not including Ow’s carrying costs, about $2 million in repairs and remodeling costs, $1 million for additional needed parking, or a plans to remediate mold in the building, decayed retaining walls or address a rodent infestation.
The purchase was approved on a split vote of four to three amid concerns over moving the County Office farther away from the Pajaro Valley Unified School District, which educates nearly half the students in the County and is under critical pressure to improve student achievement. Additionally, trustees were concerned the price was too high, considering the problems found during inspections.
“I think it’s still in the best interest of the entire community,” said County Superintendent Michael Watkins, who put together the plan to quickly purchase the building from Ow, who won’t actually own the building until sometime in May.
Watkins wasn’t concerned about fallout about ignoring the pleas of South County educators to keep the COE’s headquarters in Mid-County.
“I think we can find ways to effectively service South County and Mid County,” Watkins said.
The County Office does not conduct classes on site, but has a staff of over 300 that provides logistical and budget oversight for all the County’s school districts, teacher training and alternative education programs.
Watkins suggested that trainings and seminars involving South County educators could be conducted in vacant classrooms or space at Cabrillo.
However, Trustee Kathy Mann was among those still concerned about the impact of a move to the north.
“That’s all you ever hear in real estate is ‘Location, location, location’, and I don’t think that was the right spot,” she said.
The building and improvements will be financed with a 30-year loan with fixed annual payments of $668,000 for a total cost exceeding $19 million, significantly higher than the $37,000 a month the COE currently pays in rent.
The County Office’s current space is leased for $471,000 a year through 2010. The lease holder, Redtree Properties, intends to hold the County Office liable for the remaining payments.
County Board member Jack Dilles voted to approve the purchase because he believes it will ultimately pan out financially. “Our rent was going to escalate dramatically and if we were going to find a place and build from scratch it would cost way more,” Dilles claimed.
A Healthy Place to Work?
Consultants who inspected the building documented a variety of environmental and structural issues including rat and bird infestations, water intrusion in the basement and mold in certain rooms. When the air was tested in a select group of offices, four of them were shown to have significantly elevated levels of toxic mold, likely as the result of the building’s leaky roof.
The $2 million rehabilitation estimate for the building includes a new roof and new air handlers, but Watkins believes the mold problem will be cheap to fix. In fact, there’s no money in the preliminary budget for mold remediation. Mold removal in new high school buildings in Watsonville and Scotts Valley cost hundreds of thousands of dollars.
“I think our cleanup will be minimal,” Watkins said. “It could be just a few thousand dollars to clean up a little mold there.”
He added that water intrusion in the basement garage appeared to be the result of improperly placed sprinklers, which might be cheap to fix. However, records show the water intrusion has been occurring for at least 10 years and engineers said the problem was a result of a failed moisture barrier.
Will $2 million be enough to rehabilitate the 46,000-square-foot Encinal building?
“It had better be,” Trustee Mann said.
Though Ow Jr. has the property in escrow, he hasn’t actually purchased it from the title-holder, Wavecrest Development. He hasn’t disclosed how much he will make from the property shuffle, but that number will likely become public between now and June, when Watkins hopes to close escrow.
Though she opposed the purchase, Mann said she would make the best of the situation now.
“I have to be cooperative. There is nothing left to argue about,” she said.
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