24 Aug Statement from Mr. Larry Weeks Regarding ASU Prep Lease
August 24, 2018
August 9, 2018
Phoenix Elementary School District #1’s Governing Board heard from over 40 supporters of ASU Preparatory Academy (ASU Prep) at their August 9th Governing Board Meeting. The Governing Board appreciates the advocacy and dedication of the ASU Prep parent community.
During the meeting, Superintendent Larry Weeks affirmed the district is committed to working with ASU Prep to develop an agreement that includes reasonable rent, mutually beneficial goals and in-kind services that are monitored and reported.
In the interest of full transparency and commitment to the community, the District Governing Board had taken the step to add “ASU Prep Lease Negotiation Update” to their agenda to provide negotiation updates to the general public and ensure the community was provided a public forum for their voices to be heard. The District is deeply appreciative of the parents and community members who were at the meeting, took part in our democratic process, and expressed our shared commitment to public education. The Governing Board listened, heard their concerns, is researching the issues raised and will continue to negotiate in good faith.
Just prior to the Governing Board Meeting, leadership from the District, ASU Prep and ASU, met on August 8, 2018, and had a collaborative and effective meeting to move the negotiations forward.
The District looks forward to and hopes to come to an agreement that is mutually beneficial to the 6000+ students of the District and 1000+ students of ASU Prep; benefitting all of our students, families and our entire community and making downtown Phoenix the epicenter of exceptional student achievement.
Please email your questions or concerns to CommunityRelations@PhxSchools.org
Phoenix Elementary School District #1
ASU Prep Lease Report – July 31, 2018
District Governing Board Grants Exclusive 60-Day Negotiation Period With ASU Preparatory Academy
Phoenix Elementary School District #1 is a Title I public school district with 14 schools that serve preschool through eighth grade students across 16 square miles in central and south Phoenix. All of our 14 schools (except one) are Title 1 schools serving children and families living in poverty. That means that every student in our schools receives free breakfast and lunch. The vast majority of our students come from families learning English as a second language. Our student ethnicity is as follows: Hispanic = 80.56%, Black = 8.62%, White = 5.36%, Indian = 2.57% and Asian = 1.04%.
In 2009, Phoenix Elementary School District #1 began leasing a prime piece of real estate to ASU Preparatory Academy (ASU Prep), a charter school located at 7th Street and Fillmore Avenue that was previously home to the district middle school. At that time, the city was just beginning to recover from the “great recession” and the market value of the property was much less than its value today. In addition, the district was not yet experiencing a decline in student enrollment because the drop in birth rate did not occur until 2010.
The market value of the property compared to the lease agreement is shown in the line chart below based on 171,000 square feet including classrooms, athletic field, dance room, gymnasium, cafeteria:
An analysis of charter school lease agreements indicates that rates for charter school rent range from $9.00 – $24.00/sq. ft. Properties adjacent to ASU Prep are easily leasing at $24/sq. ft. ASU Prep is paying $1.75/sq ft.
The district began negotiating the lease agreement with ASU Prep in April 2018. The lease is set to terminate on June 30, 2019. The district is required under the lease documents to provide a full year’s notice to terminate the lease, therefore; that notice had to be provided as the district and ASU Prep continue to negotiate. The district governing board voted to continue exclusively negotiating with ASU Prep for sixty days at its board meeting on July 26, 2018.
The district governing board looks forward to negotiating in good faith with ASU Prep and is hopeful agreement can be reached. Arizona law requires the district to negotiate with potential lessees of the property to receive market value. Given the sustainable rise of downtown Phoenix and value of the property at this time, as good stewards of taxpayer dollars, the governing board must move forward to seek market value. The governing board hopes to reach agreement with ASU Prep to achieve this goal and follow Arizona statute. The district is not looking to sell the property.
The district values your questions and feedback.
Questions & Answers
Added August 1, 2018
Is the District willing and interested in talking to ASU Prep parents?
Yes, in fact the District asked to attend the parent meetings on August 1, 2018 at ASU Preparatory Academy (ASU Prep) to answer questions, but Chief Executive Officer Beatriz Rendon of ASU Preparatory Academy invited the District to attend but not answer questions.
At the next regularly scheduled governing board meeting on August 9, 2018, the District will present information regarding this topic. The purpose is to provide a presentation and hear from parents and community members. The District heard your questions at the August 1, 2018 parent meeting and our July 26, 2018 board meeting, and we want to respond.
Please understand that the District has insufficient resources to handle a flood of emails and calls, but please send your questions to CommunityRelations@PhxSchools.org or call 602-523-5900. We want to respond.
What has ASU Prep’s highest offer been during the negotiations?
As noted by Ms. Rendon, it is standard practice not to share the details of negotiations, and we will honor that practice.
When did the negotiations begin?
The District has negotiated on three occasions with ASU Prep. Initially in 2009, the parties negotiated a 5-year term, and then again approved a second five-year term in 2014. A property assessment was completed in 2014 and shared with ASU Prep to note the value of the property and discuss plans for moving forward to seek a lease agreement the reflects market value.
Most recently, the District opened negotiations on schedule in April of 2018. We shared appraisal information and our need to meet requisite Arizona statutes regarding obtaining fair market value. ASU Prep also submitted documentation on market value of the property.
On June 14, 2018, the Governing Board of the District voted to extend negotiations for 30 days.
Then, on July 5, 2018, the District reached out to ASU Prep because we had not heard from them about continuing negotiations or with a proposal.
On July 23, 2018, ASU Prep was verbally notified that the governing board would discuss the matter of a termination notice on July 26, 2018 and include an executive session.
On July 26, 2018, the District was required to act before the expiration of the extension granted. The controlling documents required the District to provide one-year notice prior to termination (scheduled for June 30, 2019). Because the negotiations were extended for only 30 days, the District was required to act by August 1, 2018.
On July 26, 2018, the Governing Board of the District directed its real estate brokers and attorneys to continue to negotiate exclusively with ASU Prep for a 60-day period.
On August 1, 2018, parent meetings were held, the District requested an opportunity to answer ASU Prep parent questions and was denied that request.
The District has requested to schedule a meeting with Arizona State University to discuss the ASU Preparatory Academy on August 8, 2018 and to discuss next steps in the negotiations.
We will keep the public informed as we continue to negotiate with ASU in good faith for a mutually beneficial agreement to meet the needs of all students.