Forest Grove charter school board in final stages of $1.5 million purchase

by: NEWS-TIMES PHOTO: CHASE ALLGOOD - The charter schools board of directors voted last month to purchase the property at 1914 Pacific Ave. for $1.5 million.A favorable real estate market and pitch-perfect timing have given Forest Grove’s only public charter school a fortuitous opportunity to purchase the property its students have occupied since 2007.

Forest Grove Community School’s four-member board of directors voted unanimously last month to buy the $1.5 million property at 1914 Pacific Avenue — which includes the main charter school building plus a pair of smaller buildings on either side — from owner-developer Preston Alexander.

The transaction is expected to close by the end of the month, board chairman Jon Stagnitti said last week.

“This (purchase) will ensure the long-term stability of the school and erases all the instability that comes from being a tenant,” said Stagnitti, who has a fifth-grader and a seventh-grader at the school. “It opens up all kinds of new opportunities for the community school.”

Now in its sixth year, FGCS enrolls 198 students in grades 1-8 as part of the Forest Grove School District.

Principal Vanessa Gray characterized the building purchase, which had been on the board’s radar “a long time,” as a smart financial move. “We won’t be at the mercy of fluctuating rental prices,” she said Friday. "Our debt service payments will be less than our rent each month.”

Focus on students

Stagnitti said the school, which operates under a banner of community-based lessons in core subjects and emphasizes the concept of sustainability, will keep on renting two adjacent modular buildings that house a portion of its student body. “Our goal is to eventually purchase those as well,” he said.

Though the board also plans to continue leasing the two smaller buildings involved in the purchase — one to Periscope Books & Tutoring and an individual property renter — its mission remains the education of its students, noted Stagnitti.

“We’re not doing this so we can dabble in real estate,” said Stagnitti, a Realtor with John L. Scott Market Center in HIllsboro. “Our focus continues to be on the students and the education they receive here.”

Alexander, who renovated the building for FGCS, “never intended to own it himself long-term,” Stagnitti noted. “The school has been exploring the option for more than a year to determine (if) a deal was possible that would make sense from a budget perspective.”

That time, said Gray, is now. With advice from Stagnitti, and with managers from Forest Grove branch of Bank of the West handling the financial particulars, the deal is “falling into place,” she said.

Money management

Although FGCS is a public school chartered by the district, it receives no general fund money from district coffers, instead relying on its per-student allotment from the state, which pencils out at 85 percent of the approximately $6,000 per pupil other schools receive.

The charter school did not get a piece of the $65.3 million bond levy approved by school district voters in 2010, Gray noted. But a combination of favorable interest rates and a focus on “carefully managing money” lent a green light to making the move to own the property.

“At this point it looks like we’re close to closing,” she said. “The latest from Preston is that he anticipates he’ll be ready by the end of January.”

The school is making a down payment of $100,000 and securing a loan for $975,000 from Bank of the West, according to minutes from the Dec. 19, 2012 meeting, during which the vote was taken.

The deal includes a 25-year mortgage, payable in 10 years, according to Stagnitti. School officials agreed to pay an additional $425,000 to Alexander at 4 percent interest over the length of the loan period.

There are down sides to owning the property, Gray conceded. “We become the responsible party for every single thing,” she said. “And we become landlords as well, though we’re hiring a property management firm to take care of that.”

‘Fantastic location’

Community school founders — including Gray, Director of Operations Karen Torry, retired teacher Robin Lindsley and Pacific University art instructor Terry O’Day — considered a number of possible locations, including the Forest Grove Senior & Community Center and property near St. Anthony Catholic Church, before settling on Alexander’s building in downtown Forest Grove six years ago.

“I feel strongly this is the right space for us,” said Stagnitti. “It’s a fantastic location for a community school. Over the years I’ve spent a lot of time there, and what I’ve observed is, the kids are excited when they go into the school and when they come out.”

As part of their curriculum, FGCS students take regular walking field trips into the community to study a variety of subjects. Two of the main building’s three floors house 5,000 square feet of office and classroom space, while the upper floor includes a computer lab and library.

Since the school opened, officials have been addressing a variety of federal Americans with Disabilities Act issues related to the third floor, Gray noted, and will continue to do so.

She said the board has “no plans to make any big changes” to the building immediately, however.

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