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Boys & Girls Club to borrow half of PEAK cost
Bridge loan allows time to collect $8 million of pledges
The Mercer Island School Board has decided to postpone the “PEAK Lease Addendum” item to its Sept. 10 meeting.
The School Board met in executive session last Thursday to discuss the Boys & Girls Club request for an amendment to its PEAK lease agreement. The amendment would allow the Boys & Girls Club to take out a bridge loan to cover construction costs needed for PEAK. The $16 million project is financed mostly by pledges and contributions. However, these funds have not yet been collected in time to cover immediate construction costs.
If the School Board approves the amendment, the Boys & Girls club will take out an $8.2 million loan from U.S. Bank for a term of five years.
According to King County Boys & Girls Club CEO Daniel Johnson, the loan will cover construction expenses until all of the funds are acquired.
A district decision on the loan, however, has not yet been made. MISD Director of Business Services Dean Mack and the district’s legal counsel, Denise Stiffarm, of K&L Gates, are working out the details of the proposed loan, Superintendent Gary Plano said at the Aug. 27 School Board meeting.
“The terms are still under negotiation,” Plano said. “Our executive session was spent weighing these terms. Dean [Mack] will continue to negotiate and bring back another version of the lease addendum to the board next week.”
The School Board is meeting tonight, Sept. 2, to discuss Mack’s proposal in an executive session. Once a lease addendum is agreed on, the document will be posted online immediately for the public to review.
Although Plano is optimistic that the School Board will approve of an addendum by this week, School Board member Lisa Strauch-Eggers was not so sure.
“I hope that the public understands that it’s possible that next week we still may not have set terms,” she said. “There were a lot of issues we had trouble with [during the executive session].”
Whatever the case, Plano has assured the public that “in the interest of transparency,” there will be at least one week between when the Peak Lease Addendum is posted online and when the School Board votes on it.
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.