WILMINGTON — A moment of quiet washed over meeting attendees after receiving the ballpark estimate of $5 million for the town taking over the former Twin Valley High School.
"I guess it's sticker shock," said Select Board Chairman Tom Fitzgerald.
The Brattleboro-based Stevens & Associates was hired to give the building a second look. The Bread Loaf Corporation previously completed a study showing the property as a perfect fit to host a community center. Select Board members wanted another opinion with alternative options and cost estimates. Possibilities were presented at a meeting last week.
Architect Bob Stevens provided some numbers Wednesday, saying a construction company would be able to refine the estimates. Those figures will be ready in about a month.
"We expect at completion of this, we'll have more accurate numbers for you," he told the board.
Before the town can buy the building, residents will have to vote on the matter as the Wilmington School District currently owns the building. That district plus Whitingham's pays costs associated with upkeep after both districts consolidated schools and decided to close the high school in Wilmington.
Jeff Glassberg, a real estate and development consultant who is a member of Stevens' team, talked of a tension existing between cost and value. He said the value of the building and its location might be at one level while costs to bring it up to modern standards are on another level.
"What the market and the community can bear has to make up the difference between the two," he said, bringing to mind the Brooks House in Brattleboro which ending up having an $8.3 million appraisal upon completion or one-third of the project cost.
Like Wilmington's former school, the Brook House was deemed essential to the town's vitality. The building had burned down in 2011. But now it offers housing, restaurants and college classrooms.
"It's been no day at the beach," noted Glassberg, who "approached" the old school as a real estate developer. "That's why my first question was, 'Does anyone want to buy the school?'"
By making it a municipal project, he said the risk lessens as it's "borne by the taxpayers." Two financial models were brought to the board.
The "Plan B" option, Glassberg said, showed the building's industrial-arts wing getting removed and the existing building rehabilitated. About 44 percent of the 44,000-square-feet space or 19,000-square-feet would be for designated for municipal uses including Town Offices, the police department and the gym. The upper floor would offer seven apartment units for rent. Adult-day service provider The Gathering Place would join the Windham Southwest Supervisory Union as a tenant in the building. Other space would be dedicated to non-profit groups. Currently, the supervisory union is the building's only tenant.
The $5,461,000 price tag includes renovation and development costs, Glassberg said, meaning architecture and engineer services, insurance, interest to pay on borrowed money and permit fees. Stevens said about $2 million would be needed for capital repair costs immediately.
The town's fiscal year 2016 budgeting of $34,7000 for Town Offices on Main Street was cited by Glassberg. The current municipal building could be sold for about $250,000 under his estimates.
"We also assumed the police department would pay a similar occupancy cost and given the square footage that would be occupied that worked out to $29,000 a year," he said. "In the aggregate, there would be about $63,000 in occupancy costs to the municipality."
Another $260,000 and change would come from groups paying rent. Glassberg said the figure had some leeway for different points of time where there might be vacancies. The town could expect to receive about $325,000 in gross income by the third year. An estimated annual operating budget of $207,000 involved plumbing, heat, snow plowing and other maintenance costs, was subtracted from the gross income.
"It leaves us with a net operating income of about $117,000," said Glassberg, explaining a municipal debt-service payment would be about $220,000 a year. "When we plugged that in, it left a net cash flow after debt service of about $44,000 a year."
Altogether, the town could expect to pay $248,000 a year in additional costs. No tax credits or grants were included in the plan. A bond was looked at as a source for borrowing money.
"This is a fundamental issue to the Select Board and for the people of this community," Glassberg said. "I go back to that cost-value issue. Is that something the town would see value for that cost?"
The other option discussed, "Plan D," was similar to the first but mostly saw the building used for municipal purposes. It did, however, involve demolition of the older section of the building. And the Southwestern Vermont Medical Center, which has shown interest in space there, was put in a separate building with 20 feet between it and the old school. The supervisory union and The Gather Place would be tenants.
The town could expect to pay about $292,000 a year in this model, Glassberg said.
"It's more because we don't have any more rental sources. We've eliminated the risk of trying to keep the building full," he said. "But there's no one to contribute to keeping the building operating."
"There's a silver bullet here," Steven said, adding that the police department's space would increase by four times that of its current space. "It's out of the flood zone and the building's re-purposed and can continue contributing to community."
Under both plans, residents would be looking at a substantial impact on their tax bills. The tax rate would increase by four cents for every $100 of assessed value. Glassberg said the price tag currently carries a "heavy contingency" to account for figures not included like back-up power generators.
Contact Chris Mays at firstname.lastname@example.org or 802-254-2311, ext. 273.