Washington Unified board approves financing and purchase agreement for 2101 Stone Boulevard

The Washington Unified School District Board of Education on Sept. 11 approved a resolution authorizing lease‑purchase financing of up to $12 million and voted to sign a purchase and sale agreement for 2101 Stone Boulevard in West Sacramento.

The measures, passed by roll call, authorize the district to proceed with due diligence, place deposits and move toward closing on a property the board said would replace the district’s deteriorating headquarters. “This evening, we are asking you to approve a resolution to authorize financing for the potential purchase of new district office facilities,” Chief Business Officer Monique Sova told the board during the presentation.

The board’s action follows a months‑long review of options, including remodeling the current district office (estimated at about $26 million), leasing, or buying new space. The district presented a recommended financing structure that relies on a direct lending lease‑based obligation rather than voter‑backed general obligation bonds; K&N Public Finance and a municipal advisor described a direct bank loan as the lowest‑cost vehicle for this purchase.

K&N representative Blake Beam told the board the district received multiple term sheets and recommended Webster Bank as the lending partner. The bid Webster offered included two term options: a 15‑year repayment term at an effective all‑in rate of roughly 4.33% (annual debt service about $1.1 million) and a 20‑year option at an effective rate of about 4.59% (annual debt service about $927,554). The total debt service across the 15‑year option was presented as roughly $16.7 million on a $12 million financing cap; the 20‑year option showed higher cumulative interest costs over the life of the loan. The board adopted the 15‑year option.

Legal counsel and staff outlined sale terms for the building at 2101 Stone Boulevard: a preliminary purchase price of $10,700,000, an initial 60‑day due‑diligence period with a 30‑day extension available, a 90‑day financing contingency tied to an additional $100,000 deposit, and two $100,000 deposits overall if the contingencies expire. Staff said parts of the building are a shell and will require tenant improvements and upgrades for district operations.

Board members pressed staff on safety and the condition of the current district office. Sova and others described the existing facility’s problems: rodent infestation, mold and asbestos in some areas, and portions of the building condemned for staff use. In response to public concern about where funds would come from, Sova said the district plans to use state‑restricted facilities funds and that “No dollars have been diverted for the acquisition of a district property.”

One public speaker, who identified himself as a concerned community member, asked whether the item had been presented previously for public information; board members said the district had considered options for years, that facility needs were identified in 2013 and 2018 facility plans, and that the district accelerated the search after assessments in November 2023 found health and safety hazards.

Board action and votes: - Resolution authorizing the financing (resolution 2526‑31) with a 15‑year repayment term and net proceeds up to $12,000,000 was moved and seconded and passed by roll call (Trustee Jessie Wong: Aye; Clerk Kurt Castro: Aye; Trustee Jesse Hunt: Aye; President Kirby Gonzales: Aye). - Approval of the purchase and sale agreement for 2101 Stone Boulevard (preliminary purchase price $10,700,000; due‑diligence and financing contingencies as described) was moved by Clerk Castro, seconded by Trustee Hunt, and approved by roll call (Trustee Jessie Wong: Aye; Clerk Kurt Castro: Aye; Trustee Jesse Hunt: Aye; President Kirby Gonzales: Aye).

Next steps described by staff include completing environmental and structural inspections, finalizing an appraisal, negotiating tenant leases that currently occupy portions of the building (staff said existing tenant leases may be extended by the seller but would be terminable by the district within a year of closing), finalizing financing documents with Webster Bank and executing the documents necessary to enter escrow. Staff said Webster’s rate lock extended through approximately Sept. 24 and that the parties targeted document execution by Sept. 22 and closing by Sept. 23 if the board elected to proceed.

Board members said the decision was meant to protect staff health and safety and to avoid further degradation of administrative facilities while preserving district cash flow through structured financing.