The Kingston City School District isn’t sure how much they’d be able to sell their Crown Street headquarters for if they officially put it back on the market. But they’re hoping district voters will approve a renovation plan for the former Frank L. Meagher Elementary School that would be partially funded by that sale.
School officials discussed the proposition, which asks voter approval to spend an estimated $4.23 million to turn the vacant Meagher building into a new district headquarters and create class space for possible use as a pre-kindergarten hub, during a meeting on Wednesday, April 19. The Meagher project would use capital reserves, state building aid, and the proceeds from the sale of the Cioni Building, which would only go on the market if voters approve the plan.
The Cioni Building was officially on the market three years ago, receiving two bids it ultimately rejected. Though no longer officially for sale at the time, Cioni received a $1 million offer a year ago from Grupo Habita, a Mexican-based firm that designs and operates hotels and wanted to turn Cioni into one of its operations. School officials used that $1 million figure in preparing the Meagher proposition, but Superintendent Paul Padalino said real estate consultants told them the value could be considerably higher now.
“Five years ago we talked about a $600,000 building, and right now this report, an asking price of $2.2 million is where we’re heading at this point,” he said. “I think that’s … that’s interesting.”
Nan Potter, owner of Potter Realty Properties, said she was “very excited and totally supportive” of Cioni going up for sale, but she wasn’t sure whether the property would fetch $2.2 million.
“I just closed the Citizen’s Bank building,” she said during the public comment period at the meeting. “It’s almost the same size as this building, it’s almost the same size parcel, and it closed for $1.4 [million]. And that was only closed two weeks ago. It’s a similar parcel, so I don’t really know where the $2.2 [million] came in.”
Padalino said selling Cioni made the most sense for the district, especially as the building has an estimated $3 million in repairs the district would need to pay for if it stayed put.
“The value of this building is growing as we sit here, as the minutes tick by,” he said. “We know there’s going to be income coming into this building to offset some of the expenses from Meagher. If we sell, this building will be put onto the tax rolls, which is a benefit to the city, the county, to our taxpayers and to the school district. In moving, we go to a school building [the district already owns] that does not have the resale value or development value that this building has. When we move into that building we will have a vacant school building that’s filled with students, with administrators and support teams, and we have an opportunity for us to really participate in the economic boom that’s going on here in Uptown Kingston. We assume we’re going to have around $1 million from Crown Street. I think that’s a low estimate at this point.”
School officials also hope to decide whether seeking bids or putting Cioni on the market for a specific asking price is the best course of action. Potter cautioned that putting up an asking price would be a different tack than the district has taken in the past with properties, including those it’s already sold.
“Make it as simple as you can,” Potter said of the Cioni listing, which school officials said could come within days of approval of the Meagher proposition. “If 2.2 [million dollars] is the property value, ask 2.2. If that’s what you’re going to ask, then it’s not an open bid, it’s list price. A list price is different than an open bid. Everything else you’ve done on all the other properties [was] an open bid.”
Trustees also expressed concern about what leasing Cioni back from a purchaser for the estimated two years it would take before they’d be able to move the district’s headquarters into Meagher would do to their profits. School officials rejected bids the last time the building was officially on the market in part because leasing the property back could have wound up losing them money. A suggestion of striking a deal with the idea of delaying closing for two years could prove complicated.
“If you want to close in two years, just remember: Investor’s money is today’s money,” she said. “Two years from now this building might be worth 2.7 [million dollars], but that’s money they can’t be using [elsewhere], they’ve committed it to you. Maybe you could negotiate a zero rent and negotiate the price of the building so it would come off of the top price.”
Some school officials noted that comparing the property at 273 Wall St. to Cioni was an oversimplification, as the former Citizens Bank was a trustee and bankruptcy sale and might not generate the same traction as the district’s property. Potter said that unlike the Cioni Building, the former bank was fully rented at the time of purchase by Tappen House Development LLC, based in New York City.
Whatever happens with the Meagher proposition, Grupo Habita is still interested in Cioni. Adriana Kertzer, a partner with the boutique hotel chain, responded to questions this week from the Robey, a new Grupo Habita property in Chicago.
“I hope I can one day do the same in Kingston at the Cioni Building,” she said. “We are looking forward to hearing the results of the May 16 referendum.”
Padalino called the Meagher proposition the most sensible choice for the district, both from a financial and educational perspective.
“Right now we have about $3 million in repairs that have to be done in the next five years in [the Cioni] building,” he said. “Roofs, boilers, other things we need to do. We could stay here and spend $3 million and not achieve any of the advantages that we talked about, or we could move to Meagher and for $3.3 million [minus an anticipated $1 million sale of Cioni] achieve all the things that we talked about. The advantages in moving far outweigh the advantages of staying, not only for the Kingston City School District, but also the entire community.”
Should the pre-K hub at Meagher come to fruition, Padalino said, it would make good on the district’s commitment to giving all its students a shot at a quality education.
“This addresses our need for more opportunities for 4-year olds in the Kingston City School District, specifically looking at our English as a second language students and our students who receive free and reduced lunch and live in poverty who are typically not being served by our community partners,” he said. “We are not looking to take anything away from our community partners. In fact, our UPK grant, which comes from the state, is totally separate from this program. That money will continue to flow into the programs that are run by our community partners. Our hope is that every four-year old who lives in the Kingston City School District will be able to a high-quality pre-K program, and we know what that does for students as far as getting a leg up and then keeping it up for the 13 years that they’re with us.”
When voters head to the polls on Tuesday, May 16, they’ll be asked to approve the Meagher proposition, a $169.58 million spending plan for the 2017-18 school year, and the fate of three open seats on the Board of Education.