Washington Unified approves $12 million financing and moves to buy 2101 Stone Boulevard for new district office

The Washington Unified School District board voted Sept. 11 to authorize up to $12 million in lease-based financing and to move into escrow on a purchase-and-sale agreement for 2101 Stone Boulevard, a two-story office property district staff said would replace a deteriorating district office.

Chief Business Officer Monique Sova told trustees the district has considered district-office improvements since 2013 and that inspections in 2023 revealed rodent infestation, exposed asbestos, mold and other hazards that left parts of the current office condemned. "We have had to move staff to a different location because we're not able to use all of the space at the district office," Sova said as she outlined prior studies and options.

The board heard a funding recommendation from municipal advisor Blake Beam of K and N Public Finance, who described a direct-lending, lease-based obligation with Webster Bank as the lowest-cost financing vehicle the staff solicited. Beam summarized the two repayment options that were presented: a 15-year term (quoted interest ~4.33%) and a 20-year term (quoted interest ~4.59%). "The annual debt service for the 15-year term is roughly $1,100,000 per year," Beam said, adding that total repayment for the $12 million borrowing under the 15-year option would be roughly $16.7 million.

Trustees asked questions about where the funds would come from and whether restricted facility funds would be diverted from other uses; Sova responded that the money proposed for acquisition is state-restricted facilities funding and "may only be used for facilities. No dollars have been diverted for the acquisition of a district property," she said.

On a roll-call vote, the board approved resolution 2526-31 authorizing the financing with a 15-year repayment term and net proceeds of $12,000,000. The subsequent agenda item to sign a purchase-and-sale agreement moved forward after staff described the property: a roughly 3.5-acre site with a two-story building built in 2003, with approximately 53,046 square feet of office space and active tenants. Legal counsel Samuel Santana summarized due-diligence steps: an initial 60-day inspection period (plus a 30-day extension option), a 90-day financing contingency, and two $100,000 deposits tied to those periods. The preliminary purchase price presented to the board was $10,700,000.

Trustees expressed interest that the district complete inspections and an appraisal during due diligence and noted tenants could remain while the district phased in its occupancy. The board then approved moving forward into escrow on the purchase-and-sale agreement.

Other related fiscal actions approved at the meeting included a piggyback contract for Imperial Dade to supply paper products to food service (estimated contract value $1,000,000, paid from the cafeteria fund, with projected savings of about $250,000) and routine consent-agenda items.

The approved financing does not change the board’s stated intent to use proceeds from any future surplus property sales for facilities work. Staff said final documents would return for signature and that closing timelines discussed assumed rapid movement if the board chose to proceed (staff described target document execution within days and a potential closing in late September).