B & G Club will seek bridge loan for PEAK construction
By ELIZABETH CELMS
Mercer Island Reporter Contributor
August 28, 2009 · Updated 1:32 PM
The Mercer Island Boys & Girls Club is asking the school district to amend its PEAK lease agreement so that the club may obtain a bridge loan for construction financing on the project. Construction on PEAK, a $16 million youth center, is currently underway. The Boys & Girls Club hopes to take out a U.S. Bank loan to cover construction costs while the club collects money pledged from individual donors, according to the School Board’s Aug. 27 “PEAK Lease Addendum” agenda item.
The topic will be brought before the School Board at tomorrow’s regular meeting. After discussing the issue, the School Board will allow two weeks to pass for the public to think about and comment on the proposal. After this "window period," the School Board will decide at its Sept. 10 meeting whether or not to approve the Boys & Girls Club’s request for a construction loan.
The district’s legal counsel, Denise Stiffarm of K&L Gates, said little more can be said on the proposed loan at this point.
“The basic scope is that the Boys & Girls Club is getting all their funding in place right now. There’s just a timing issue because some pledges are tied to the completion of construction. This is the bridge they’re trying to meet,” she said.
King County Boys & Girls Club CEO Daniel Johnson, who helped to develop the PEAK lease agreement last May, described the amendment as “minor.”
“It’s a minor change in the lease agreement that [U.S. Bank] is requesting. It has to do with our ability to use the PEAK building as collateral for a construction loan,” Johnson said.
As of April 9, the Boys & Girls Club had raised $8.2 million in pledges toward PEAK construction with $4.6 million secured in the bank. The club later received $1 million in contributions from the City of Mercer Island, on top of $4.5 million from the sale of the current Boys & Girls Club’s East Seattle property. U.S. Bank is responsible for financing PEAK construction.
The issue will be publicly discussed at the School Board’s regular meeting at 7 p.m., tomorrow night, Aug. 27.
A full copy of the School Board’s Aug. 27 agenda can be viewed at www.misd.k12.wa.us/board/agenda.