A number of the School Board directors seemed confused by the proposed deal with Lorig and Associates on the Lake City School. Perhaps I can clarify the situation.
The proposal is for Seattle Public Schools to buy an office building for $3.2 million as an investment property.
If you think this is a good deal for the District and something the District should be doing, then why stop here? Why not use our capital funds to buy additional investment properties? In the current era of tight credit and low interest rates, the District could find a lot of bargains. Cap rates on Class B and Class C buildings are high right now, particularly outside the downtown core. The District could realize very strong returns on these investments - returns comparable to the offer from Lorig. After all, Lorig would offer the same deal to anyone else - to take over the building for $3.2m. The District's money is no greener than anyone else's. While it is true that the District has a history with this building, that history doesn't effect the terms of this investment.
On the other hand, maybe the District shouldn't be using its capital funds for real estate investments aimed at profits, but to build and maintain schools for students.