As a five-year lease neared its end, Nixa Public Schools and developer Curtis Jared entered into a purchase agreement in early June for the district’s Early Childhood Center.
The center, which is valued at $8.5 million, will continue to be leased until June 2020. At that time, Jared has agreed to sell the property to the district for $900,000, resulting in a charitable donation of $7.6 million.
Zac Rantz, chief communication officer for Nixa Public Schools, said the district was in talks with Jared for months prior.
Jared Enterprises Inc. constructed the over 23,000-square-foot building in 2014 at a cost of $2.4 million. Jared, the real estate and development company’s CEO, did not return Springfield Business Journal’s requests for comment. According to a news release, Jared worked with Nixa staff throughout the design and construction of the project to ensure the building met the specific needs of the students.
The center is used by more than 140 pre-K students who participate in specialized programs for those with and without special education needs, according to the release. It has six classrooms and on-site occupational and physical therapists, as well as speech pathologists, assessment teams and administrative staff, Rantz said.
The district had up to four five-year lease renewal options, according to SBJ archives. Rantz declined to comment further on how the agreement was reached.
SBJ previously reported the Missouri Department of Elementary and Secondary Education reached a deal to pay about $5 million over the five-year period, which would allow the district to own the building.
Nancy Bowles, communications coordinator for DESE, said the $5 million lease-purchase agreement was offered to the district, but it opted for a lease reimbursement.
The purchase agreement was made under the direction of Superintendent Gearl Loden. His predecessor, Stephen Kleinsmith, signed the initial lease deal. Kleinsmith said he’d make the deal all over again if he had to.
“We had to decide whether we wanted to pursue a handshake of an agreement, and it turns out it was a very good thing that we did because we were able to almost six years later close the deal and own it outright,” Kleinsmith said.
DESE has reimbursed the school district annually for the lease of the center and will continue to do so until the sale of the building, Rantz said. DESE will not be involved in the purchase.
Bowles said the district will receive $875,000 in reimbursement for last year’s lease expenses.
Next year, the reimbursement rate will be determined by a formula with several variables, including attendance numbers.
Rantz said other early childhood education expenses, such as salaries and supplies, will continue to be reimbursed through the state after the purchase of the building next year.
Kleinsmith said the lease deal the district made with the state during his tenure was unusual and remembers warning the board that they were in uncharted territory.
“I like to think it was a big and bold move on our part, and we did it with one thing in mind: to provide a service to a much-needed community for early childhood education,” he said.
The state does not enter such agreements very often.
“Lease-purchase agreements and lease reimbursements are not common, but they’re not unheard of in Missouri,” Bowles said. “Fewer than 20 districts have had similar arrangements.”
Missouri has 518 traditional school districts and 36 charter local education agencies.
In 2016, Jared Enterprises also agreed to sell the $5.8 million Shining Stars Early Childhood Center to Springfield Public Schools for a discounted rate of $4.1 million, according to SBJ archives. The building, which was a former Price Cutter, was a DESE-funded project from 2011.
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