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Bemidji School Board OKs purchase agreement for old First National Bank building

Chris Leinen has seen the Bemidji Youth Learning and Working program relocate four times and the Alternative Education Center move twice since he's been with the Bemidji School District.

But by the end of this summer, BYLaW, AEC and the adult basic education programs will have a new home, a permanent one, at the old First National Bank Building located at 502 Minnesota Ave. N.W.

The Bemidji School Board unanimously approved the purchase agreement to buy the old downtown First National Bank building at its meeting Monday night.

According to Leinen, the District's director of business services, the building, to be purchased by the District for $700,000, will reduce the local property tax levy approximately $73,000 per year.

The school district has three methods of using property. It can own property, go into shared use agreements with other entities or lease properties. In any lease arrangement, the District must receive levy authority from the Department of Education to raise property taxes locally in order to pay the lease.

"Those leases are, to some degree, outside our control," Leinen said. "You can decide when to terminate them, but so can the owners. We were put into a situation where we needed to find a new home for the BYLaW program."

The District received notice from the owner of the BYLaW property, currently located at 1741 15th St. N.W., that it would have to vacate by the end of this summer, Leinen said. After looking at several properties, the District set its sights on the old bank building.

"It's in excellent condition," Leinen said. "It has concrete block, is handicapped accessible, includes an elevator, sprinklers downstairs and it's 25,000 square feet."

Superintendent Jim Hess added that occupying the old bank building will reinvigorate a part of downtown.

"We will be helping to boost the traffic downtown, sidewalks and streets," Hess said. "We'll take a building that has been vacant for a year and turn it into a hub of business and activity for the community. We think it's a win-win proposition."

The purchase price is for $700,000 with earnest money in the amount of $25,000 due on April 20. The balance is due upon closing the sale on June 1.

This process will involve a lease purchase arrangement with Wells Fargo LLC holding the title to the property and the school district making payments on the lease purchase agreement over 15 years.

School board member Steve Johnson, shared his concerns about BYLaW students being housed downtown.

"The BYLaW program is a really structured program," said assistant superintendent Bob Vaadeland. "They have tight regulations and are well-staffed. I don't see it being a problem downtown."

Vaadeland added that the BYLaW program would likely be in a section of the building that is separated from the other programs, possibly in the basement.

Leinen said he is expecting an updated appraisal as part of the arrangement that the board will need to act on at a main meeting. The most current appraisal is $1.65 million. Leinen expects the appraisal will not change. At some point, the board will be requested to act upon receiving a donation from First National Bank in the amount of the difference between the appraised value and the purchase price.

"We're looking to take off the tax base a building that probably generates about $45,000 a year in tax revenue," Leinen said. "This deal is only possible because of the significantly reduced figure price and the donation factor that First National Bank is willing to come forward to for the school district."

As part of the purchase, the parking lot adjacent to the property will be included. It can hold up to 25 vehicles. Leinen said the District will purchase parking passes for the downtown parking lots if more parking spaces are needed.

"We're very hopeful that this is a win-win," Leinen said.