In July the Nordic Heritage Museum will start paying nearly double it's current rent for a Seattle School District building while it waits to move into a new facility.

The non-profit has settled a new five-year lease with the district, boosting its rent from about $72,000 annually to $139,000, a 92 percent increase, said Gordon Strand, business manager for the museum.

"It's a hefty increase," said Strand. "...But we knew that going in so we have to deal with it."

The museum didn't have much choice but to accept a new lease from the district while it continues to fundraise for a newer updated facility on Market Street.

The plan is to move out of the old Webster School on Northwest 67th Street and into a new building on Market Street by early 2012. In 2006, museum staff completed a $5.1 million deal to buy the 75,000 square-foot Fenpro Building in downtown Ballard.

Strand said the full impact of the significant rent increase wouldn't really be felt until next year. But he anticipates it'll be tough to manage as the museum focuses on raising funds for a new building and the lease increase.

"That's always a tricky proposition," said Strand. "It will be difficult but we've got a lot of strategies."

The new lease is equal to the district's return if it were sold, said Ron English, the district's property manager.

Eric Nelson, executive director of the Nordic Heritage Museum, said about 20 percent of the funds needed to design and build the new facility has already been acquired. The tentative goal is around $50 million.

For more than a year Seattle School 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, including the old Webster School and four other buildings that have "youth and family" leases with the district.

Organizations with these leases pay a discounted rent of 50 percent of fair-market value in exchange for maintenance of the 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.

Nelson, who was hired as director last month, said the museum under its past leadership had made several "good faith" attempts to buy the building, but the district hadn't evaluated its need for the facility yet. The deal for the Fenpro building was already being negotiated by the time the district decided it wanted to sell Webster.

The district has said it will allow long-term tenants first dibs on purchasing the property, but with the museum leaving it's unclear if the building will be put on the open market.

The approximately 67,000 square-foot site, which includes Webster Park (leased by the city from the school district), was appraised at more than $4 million. The old school building makes up about half of the site and is valued at $2.8 million, said Strand.

Another surplus building here could be purchased by its long-term tenant to preserve it as an "activities center" for the Crown Hill neighborhood.

The Small Faces Child Development Center has leased the old Crown Hill Elementary School at Holman Road Northwest and 14th Avenue Northwest for the past 25 years. It's currently working with the Cascade Land Conservancy and the National Development Council on developing a purchasing plan.

The district has appraised the 3.4-acre lot at roughly $7.5 million. 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 this session.

"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.

Also, $1 million is already designated through the Pro-Parks Levy to create a park there, which could be matched by King County's public land trust program.

The center's 10-year lease is scheduled to expire this May, but Catherine Weatbrook, a member of the Small Faces Board of Directors, said the intent is to have a purchase agreement with the district in place by then.

The district has said it would be flexible with payment options and accept installments. The entire amount wouldn't have to be handed over right away.

Small Faces pays $137,000 in annual rental income, and that amount could still be increased substantially 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 English.

Weatbrook said Small Faces questions the appraisal amount generated by the district and is having it evaluated. Some parts of the site are "unbuildable" while the district's evaluation considered its full development potential, she said.

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

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