The Fauntleroy Community Services Agency is facing a rent increase of double what it pays now to lease an old Seattle School District-owned building when its 10-year lease runs out Feb. 29.

The non-profit has been informed its rent will be hiked from $70,000 annually to $140,000. But because the district wants to sell the old Fauntleroy schoolhouse, the group must also decide by July if it will try to purchase the building and adjoining land, appraised by the district at more than $9 million.

District staff has been evaluating what to do with real estate it owns that are no longer used for schools. Based on enrollment trends, it's recommended that some be sold, such as Fauntleroy and four other buildings that house "youth and family centers."

Organizations with these leases pay a discounted rent of 50 percent of fair-market value in exchange for maintenance of the district-owned buildings. But many of those leases are at the end of their 10-year run and the district will bring up rents to adjust to the current market rate.

The Fauntleroy Community Services Agency will have to either sign an option agreement or a purchase contract with the district by June or leave the building. The entire purchase amount wouldn't have to be handed over, but a clear fundraising plan would need to be set, said Kevin Wooley, president of the Fauntleroy non-profit.

The group is currently conducting a feasibility study with the Cascade Land Conservancy and the National Development Council on whether or not it could purchase the site from the district. That should be released this spring and include recommendations and possible funding sources.

The city has offered up a million dollars to help with the purchase and another $2 million could come from House and Senate bills currently moving through the Legislature.

"The Community Schools Act of 2008" would make available through a competitive grant process, funds for the development of community schools and to convert empty school buildings into community facilities.

The School Board will still need to approve any sale and changes in rental policy.

Even if a sale were negotiated, the new rental rate would still have to be paid in the interim. To manage the rent surge, the district has set up an "informal" transition period. For the first year, 75 percent of the rent increase would be due.

The amount increases each year so that during the fourth year, the full market value (including adjustments for inflation) would be paid, said Ron English, the district's property manager.

Wooley said given the cost to maintain the more than 90-year-old building, the agency is already losing money. He doesn't' know how it could handle a substantial rent increase on top of that.

A leaky heating pipe, for instance, ended up costing about $7,000 to fix because of required asbestos abatement.

A for-profit dance studio and catering company sublease space in the Fauntleroy schoolhouse at market-rate rents, which help to subsidize maintenance and rent expenses, but not quite enough, said Wooley.

Four classrooms are available for rent, but Wooley said an old schoolhouse isn't exactly an ideal rental space for a business. Also, potential renters could be deterred given the uncertain long-term future of the building.

"There's not a big clamor out there to rent a gymnasium for market rate," said Wooley. "It's not an easy space to rent necessarily."

Kim Sheridan, director of the Fauntleroy Children's Center, the schoolhouses' anchor tenant operated by the Fauntleroy Community Services Agency, said the appraised value doesn't take into account necessary repairs to the facility.

The roof will have to be replaced soon and electrical and heating upgrades are needed.

Sheridan is a little concerned about the timeline laid out by the district to sign a purchase contract, but the district has said it would remain flexible and that contract negotiations could run over.

Wooley plans to organize a community meeting soon to discuss developing or remodeling some of the site to make it more rentable.

"Frankly, we don't see any other way to make this work..." he said.

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