As bulldozers ravaged the crumbling remains of the old South Middle School in Arlington Heights this week, the community was handed the keys to a shiny new $18 million replacement.
When the stunning 144,000-square-foot, red-brick building throws open its doors to students Tuesday, the campus will hold the distinction of being the first public school in the state to be leased from a private company.
Like a car shopper short on cash and offering up nothing but a battered old car as a trade-in, District 25 officials concluded that a lease was the fastest route to the construction of a new middle school.
“We were in the position where we couldn’t go to the voters with a referendum (issue),” said Peter Willcoxon, the district’s assistant superintendent for business.
“Even if a referendum (issue) passed, we were so close to our debt ceiling, we couldn’t sell any bonds.”
While the board agreed that both South and Thomas Middle Schools were in dire need of major renovations, voters had already approved a $22 million proposal in 1989 to refurbish the district’s elementary schools.
The district’s financial pinch was finally eased after Willcoxon and other officials visited a construction project at the University of Cincinnati that was funded through a lease agreement with a private corporation that included Turner Construction.
Despite cries of “foul” from area tax watchdogs who opposed the lease deal, the district entered into an agreement with Educational Facilities Inc., whose interests include Turner as well as a Miami-based investment company and a Phoenix law firm.
Since the private company secured a top AAA bond rating, the costs incurred to the district are equal to what would be paid via a traditional bond issue.
The district will make semiannual lease payments totaling $1.4 million each year. The lease will demand that the district dip into its operating funds, but officials suggest the deal could switch gears in the next few years.
At that point, the district’s debt will have diminished and voters may once again be asked to cast ballots on a referendum issue.
“We anticipate at some point down the road converting this to a traditional bond sale,” Willcoxon said. “This way, we could free up the lease payment.”
Though a mere $10 will transfer the building from the private corporation to the district at the end of the 17-year-lease, members of the Northwest Tax Watch remain outraged over the arrangement.
“They took the voice away from the taxpayer,” said Norb Todd, the group’s president.
