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Board approves multi-year lease with Austin Centers for Exceptional Students; district expects rent to rise to ~$900,000 by year three
Summary
The governing board unanimously approved Resolution No. 573 to lease additional space to Austin Centers for Exceptional Students (ACES). The phased agreement will increase annual rent from about $216,000 at the current site to roughly $600,000 in year one at the new location and about $900,000 by the final phased year, district staff said.
The Paradise Valley Unified School District Governing Board voted unanimously to approve Resolution No. 573, a multi-year lease agreement with Austin Centers for Exceptional Students Inc. (ACES) to occupy space on the Air Libre campus.
District CFO/operations staff described the contract as phased: the district currently receives about $216,000 annually from ACES at the Cholla Annex. Under the new lease, rent would increase to approximately $600,000 in the first year after the move and about $900,000 annually by the final phased-in year; the lease includes an inflationary adjustment.
Chief Financial Officer Jill Barragan said the higher rent is driven primarily by square footage: ACES is moving from a smaller annex to significantly more space at Air Libre. “The increase in the rent is coming from increased space,” Barragan said. She added ACES already rents from other Valley districts and, in her assessment, has been a reliable tenant that should be able to afford the rent increases. Barragan said the district currently receives about $216,000 for the portion they occupy at Cholla and that the new lease phases the increase over three years.
Board members asked about contingencies if ACES were to terminate the lease or stop paying. Barragan said the lease contains a termination clause that requires substantial notice from ACES — she referenced an 18-month to two-year notice requirement in the lease — and added the district could terminate for cause if rent payments stopped. She also said ACES’ board had already approved the lease.
Trustees asked how the additional revenue might be used. Barragan said the funds would go into maintenance-and-operations-type accounts and could be used to shift certain facilities salaries out of general maintenance budgets, freeing funds for other purposes.
The motion to approve Resolution No. 573 passed unanimously.
Why it matters: The lease will increase recurring district revenue significantly if ACES occupies the larger space and meets the lease terms. Board members emphasized that the district will not spend funds before they are received and that the revenue is likely to be used for facilities and maintenance operations.
What’s next: District staff will finalize lease execution and incorporate the phased revenue into future maintenance and operations budgeting.
