MORRIS COUNTY

Mt. Olive Board of Ed moving to business campus

$1.7 property purchase half the cost of planned renovations

Michael Izzo
@MIzzoDR

MOUNT OLIVE  —The Township School District offices will move across town at the start of the academic year, leaving behind a 90-year-old school building in favor of 40,000–square-foot modernized office space recently acquired by the Board of Education that could provide the district with a revenue stream for decades and allows for a $3 million renovation to the high school.

The school district offices will move from the old Budd Lake School on Route 46 to the Northwest Professional Center, located at 227 U.S. Route 206 in the Flanders section of the township, over the weekend.

The property includes two 20,000 square-foot buildings and the board of education will occupy most of one of them. The remaining space in that building and all of the others will be leased to area businesses.

Acquiring the property cost the Board of Education less than half of what it would have cost to renovate the existing administrative offices at the Budd Lake School, which was last remodeled in the early 1980s.

Superintendent Larrie Reynolds said “massive changes” estimated at $3.5 million would have been necessary to bring it up to code during a renovation. He said the extensive renovations the school needed include asbestos removal, improvements to comply with the Americans with Disabilities Act, and modernizing boiler and ventilation systems.

“It doesn't make sound financial sense to invest in a building that is 90 years old,” Reynolds said. “Even if we put $3.5 million in it, the building wouldn’t be worth that much. That’s never a good business decision, and we hate spending on administration as opposed to the students.”

Reynolds said a three-year sequence to renovate the building was scheduled to begin in the fall, which would have essentially stripped the building down to the walls and kept employees out for several months.

Instead, the board paid $1.7 million for the Northwest Professional Center, agreeing to lease all non-district space for 15 years.

The former owner, a private individual, will keep the first $2 million in profits from those leases, after which all money becomes revenue for the school district, an estimated time of 10 to 15 years. The previous owner will assume all expenses aside from routine maintenance until the $2 million is reached.

“This deal gives the district modernized offices at less than half the cost of what we were going to have to spend to renovate the current administrative building,” Board of Education President Anthony Giordano said. “By at most 20 years into the arrangement, the money that the district will receive from leasing unused space will pay for the entire purchase of the buildings. It's an incredible cost-effective opportunity for the district that provides a revenue source for years to come.”

Reynolds said the office space is currently 100 percent occupied and generating about $350,000 annually in revenue.

“Thirty, 40 years down the road it will be a really nice revenue generator,” Reynolds said, “That can pay for a lot of things in the district for years to come.”

The Board of Education had been preparing to renovate the administrative offices by setting aside money in a capital reserve fund over the past several years in addition to receiving $1.6 million from the state.

Purchasing the new office frees up the saved money to improve a 20,000-square-foot auditorium at Mount Olive High School known as “the pit.”

The underutilized space has design flaws including sloping bleaches, which have made it off-limits to students for more than a decade.

A $3 million project to redevelop the auditorium is scheduled to begin this fall and will break up the space into three separate learning spaces, a STEM-focused “maker studio” for pre-engineering students, an audio recording studio and learning center, and a multi-purpose performance area that can be used for activities ranging from artistic performances to wrestling matches.

“We want to become a preeminent STEM leader in New Jersey,” Reynolds said. “We have the space just sitting there and it could be a very cool engineering center.”

The learning spaces should be operational by fall 2016.

All of the money needed for the project is already available in the district’s capital reserve fund so Reynolds said there will be no need to raise taxes for any of the work done.

“Unlike previous building projects, neither the pit project nor the new administrative offices will increase taxes,” Giordano said. “We believe that investing in our flagship school and owning modern buildings that will provide a revenue stream serve the district and its taxpayers well.”

Reynolds said the Budd Lake School is expected to sell before the end of the year. There are currently several interested buyers, and while he didn’t say what it might sell for, citing ongoing negotiations, the building is listed for sale at $1.6 million.

A baseball field located in back of the building that is on the property and currently in use by the township’s recreational teams should stay put as long as the new buyer doesn’t need the space.

Mount Olive will move into it's new administration office in the Northwest Professional Center before the start of the academic year.
Mount Olive will move into it's new administration office in the Northwest Professional Center before the start of the academic year.
Mount Olive School District's administration is moving out of the 90-year-old Budd Lake School.
Mount Olive School District's administration is moving out of the 90-year-old Budd Lake School.
Mount Olive School District's administration is moving out of the 90-year-old Budd Lake School.
Mount Olive will move into it's new administration office in the Northwest Professional Center before the start of the academic year.

Staff Writer Michael Izzo: 973-428-6636; mizzo@GannettNJ.com