Seattle School Board members have asked district staff to come up with alternatives to a proposal that would alter the districts' youth and family policy for tenants in surplus buildings. Members asked for alternatives because the current proposal could triple rents for tenants like the Fauntleroy Children's Center in the old Fauntleroy School.

To help stave off projected multi-million dollar budget deficits in the next few years, staff has recommended the district sell or lease out long-term eight of its facilities not used by school programs to yield more funds for maintenance at other district properties.

Leases and other properties earn the district around $2.7 million annually. That money goes into a capital eligible fund to pay for replacement equipment, exterior and interior improvements, nutritional services, health and safety issues and other services not paid for by levies.

However, those demands have exceeded the funds available and the district has had to dip into operation and academic funding, said the district's chief financial officer, Arthur Jarvis.

Tenants who provide youth and family services pay a discounted rent of 50 percent fair-market value in exchange for maintenance and general up-keep of district-owned buildings. There are seven youth and family centers citywide, including the Fauntleroy Children's Center.

Various small businesses, a for-profit dance studio and a catering company sublease space in the schoolhouse and pay market-rate rents, a portion of which subsidizes the children's center.

Ron English, deputy legal counsel and property manager for the school district, recommended the board change its current policy to limit the subsidy to kindergarten-through-12th grade related activities because some services offered in surplus buildings don't meet the policy requirements but are still getting the subsidy.

The need to alter the policy also stems from guidelines set up in the state constitution that limits school spending to kindergarten-through-12th grade activities, including after school and preschool programs but not services like adult seminars.

However, the School Board can decide what activities fit that criterion, said English.

The district reviewed its use of 19 buildings. Building capacity and enrollment trends were the main criteria used to determine which buildings should be kept or disposed of. Growth in the northwest part of the city is expected to increase in the next 25 years, but the southwest area will have substantial excess capacity, according to the district.

Fairmont Park, which will be vacated due to school closures and consolidations this fall, and Hughes, an interim site, aren't needed to meet future enrollment and can be surplused, said English.

The district also owns the retail-residential Jefferson Square facility in the Alaska Junction. There are no plans to sell that property.

In addition to a change in policy, the district will be increasing rental rates to most tenants based on a reassessed value of current market rents. The originally proposed policy change in conjunction with new rental rates could in some cases double or triple rents for Fauntleroy and others.

Representatives from most of the effected youth and family centers spoke at a School Board Finance Committee meeting last month and delivered a united message: Rental increases are expected when leases are renewed, but a policy change that would drastically increase their rents could shut them down.

Some at the meeting were in favor of a tiered subsidy system. That could be a policy that allowed kindergarten-through-12th grade programs the 50 percent subsidy, while for-profit services would be charged another price.

The policy change and rent increase is only part of the challenge ahead for some tenants. Property management officials have recommended that five of the seven youth and family centers, including Fauntleroy, be considered surplus. The School Board could decide to sell the buildings.

English said the district would not consider other offers until tenants were given a "full and fair opportunity" to purchase the sites at fair market value. That could mean some of the already struggling non-profits would have to drum up millions of dollars to purchase the properties.

Kim Sheridan, director of the Fauntleroy Children's Center, said its board is working on a plan to approach the district with. It's possible they might want to buy the building, she said.

If the rents were increased drastically, then buying would probably be a better option, especially since relocation of a program its size would not be likely, said Sheridan. Still, she'd rather the district leave the policy alone.

"The system they have in place is the one that works," Sheridan said, noting that rents from tenants in the building help subsidize the children's center and pay for building maintenance.

The children's center will host an open house at the end of April to "test the pulse" of the community and what they'd like to see happen with the old schoolhouse.

The district has indicated it would remain flexible for how and when tenants could purchase the buildings.

"I would not go to anyone else without telling the tenant straight up," English said.

Finance committee chair, Michael DeBell, is in favor of partnering with the city to buy some of the properties. The city has already set aside $5 million in its general budget to help purchase a few surplus sites in conjunction with neighborhood groups that have been long-time tenants.

"I feel very strongly that this is a natural opportunity for the city," DeBell said. "It makes sense with their mission to support community centers."

Board member Irene Stewart seemed skeptical about why the policy was being reviewed in the first place.

"I think we are going down a real slippery slope here," she said.

Rebekah Schilperoort may be reached at 783.1244 or rebekahs@robinsonnews.com