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District proposes phased increases to community campus lease rates to narrow operating shortfall
Summary
District staff and the finance committee proposed incremental increases to community campus lease rates—phased over five years with discounts for nonprofit partners—to reduce a substantial operating subsidy the district currently covers for the facility.
District staff presented a recommendation to the board on April 8 to incrementally increase lease rates at the community campus, with larger discounts retained for nonprofit partners, and to transfer leasing management responsibilities from the finance office to the buildings and grounds function.
Director Sean Benion and finance committee members said the community campus currently costs the district approximately $539,000 per year to operate while bringing in about $240,000 in rental revenue, creating a sizable annual subsidy. Staff recommended moving some lease administration duties to the buildings and grounds director and proposed phased rate increases (roughly 10% annually for a period) to bring rates closer to market over a five‑year window while limiting immediate impact to nonprofit tenants.
Staff said industry comparables for the Hailey/Bellevue area range from $1.50 to $2.00 per square foot for commercial leases; the campus currently charges about $0.75 per square foot (about $7.50 per square foot annually as described in the packet). The proposed schedule includes staged increases with deeper phase‑in for not‑for‑profit tenants and a pathway to reach a rate still described in staff materials as below market in year five.
Trustees asked for additional details: projected revenue impact year‑by‑year, evidence/market comparables to justify the schedule, and whether there are additional vacant spaces that could be leased. Staff said work is underway to model fiscal impacts and that the finance committee supports incremental steps and further documentation before action. The board was asked to consider whether the district might ultimately reclaim spaces if partners vacate and whether supplemental memoranda of understanding should better define partner responsibilities.
No final decision was made; staff will bring a refined proposal (including market comps and year‑by‑year revenue projections and a plan for insurance/CapEx needs) to the action agenda later in the spring.
