Ownership of Cosmos, Minn., school building remains in ACGC's hands
COSMOS - When negotiations began earlier this year, it was fully expected that by July the city of Cosmos would be the owner of the former elementary school in town.
The Atwater-Cosmos-Grove City School District was looking to sell the structure after it moved its elementary students out in 2012 and offered to sell it to the city for $1.
In exchange, the city would maintain the building and earn lease payments from the Southwest/West Central Service Cooperative that houses its ever-expanding Cosmos Learning Center autism program in the former school. The program serves students throughout the region and employs a number of city residents.
"At face value, it looked like a great deal," said Cosmos Mayor Rich Gieser.
That transaction turned sour, however, when the city determined it could lose $70,000 a year with added insurance fees and long-term capital repair costs.
The city and the service cooperative also could not reach an agreement on the lease rates.
"The numbers didn't add up," said Gieser in an interview Tuesday. "We weren't going to subsidize the extra cost to the citizens of Cosmos."
The rejection was disappointing to the AGCG School Board members and district administrators who had hoped the district could get out of the real estate business.
The service cooperative currently leases about 70 percent of the building for the Cosmos Learning Center. That's expected to expand to 80 percent this year.
The remaining space is leased to other entities, including one business and the city of Cosmos itself for its summer reading program.
The school district is being "creative" in reducing maintenance costs and is currently turning a small profit from rental revenues, according to ACGC School Board member Scott Stafford. He said the building has been well-maintained over the years.
Although renting the building to tenants will "never be a money-maker" for the district, Stafford said the arrangement is "going in the right direction in regards to dollars and cents."
Gieser said the city put together a citizens committee and worked with a consultant to review the financial data and expected long-term maintenance costs and came up with a different financial forecast.
"The city doesn't want the building for the same reason the school district doesn't want it," he said.
Gieser said if the city could have come "close to breaking even," the city likely would have taken the building over.
"I'm glad we took the time to analyze it. Otherwise we might have done something that wouldn't have been good for anybody," he said.
At their meeting Monday night, the school board members heard an update from the facilities committee that is proposing the district pursue an arrangement to lease the entire building to the service cooperative, which then would deal with the day-to-day activities at the building and possibly manage all the lease arrangements with the other tenants.
Under this plan, the school district would still own and maintain the building.
Stafford said the committee is looking for ways to eliminate landlord "headaches" for administrators so that they are not bogged down with rental arrangements.
There has also been talk of the cooperative purchasing the building, but Stafford said it's not known if it can legally own property.
That question has gotten the attention of at least one local lawmaker, said Stafford, adding that there are numerous questions yet to be answered as the district searches for a long-term solution.
Gieser said he's "really sorry" the deal didn't work out between the city and the school district, but he hopes the Cosmos Learning Center continues to operate in town.
"We want them to stay. It's important work that they're doing," he said.
Meanwhile, the city is in the very preliminary stages of seeking state bonding money to build a new municipal center for its city office, library and community center. The library was destroyed by fire in 2011.
Gieser said even if the city had purchased the school, there would not have been enough remaining space there for all the city services.