Federal Way School Board OK's purchase of $8.9M Educational Service Center

Federal Way Public Schools will be getting some new digs.

On Tuesday, the school board approved a measure that would allow the district to purchase the Northwest Corporate Center.

The property, which sits across from City Hall on 8th Avenue South, is more than 70,000 square feet and will cost the district $8.9 million to purchase as the new Educational Service Center (ESC).

Currently, the ESC is located on Pacific Highway South in a parking lot behind Indochine restaurant. The 50-year-old building is small and houses about half of the district’s administrative team. The rest of the staff is located throughout the district, including portables at schools and in The Commons mall.

The ESC has been in its current location for 22 years.

Now, due to the recession, the district discovered that to buy a commercial space already in existence in Federal Way would be cheaper than either building something new or remodeling the old building.

The district is currently in the process of due diligence. The board passed the measure on the presumption that nothing serious would be found during the due diligence process. Due diligence means having professionals look at the roof, the structure, the water, the parking lot, the sewer and everything else that could be a major fixer-upper for the district.

“It’s ‘if you buy this building, here’s all the risks,’” Chief Financial Officer Sally McLean said.

The district has been going through the process since mid-December, McLean said.

Once the sale approved, the district will have to work on remodeling the building, which is currently stripped down to the sheetrock. That will cost another estimated $4.5 million, McLean said.

On Wednesday, the district staff weighed their options for moving. Because of the busy school year calendar, logistically the best time of year to move is July.

“It’d be painful to move in now,” Director of Facilities Rod Leland said. “This way, we can walk through the process instead of sprint.”

The other good news about the current recession is that construction costs are very low, basically just at cost.

“We think we’re at the bottom,” Leland said. “We’ll take advantage of that.”

The district will be paying for the project with the future sales of both the current ESC building and the maintenance, operations and transportation facilities that will be replaced as part of the current construction bond. Rather than sell in the down market, the district plans on using bridge financing until a better real estate market.

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