Study shows costs of San Dieguito’s proposed new office building

At an Oct. 30 workshop, the San Dieguito Union High School District board members discussed the results of a feasibility study to move from their current office in Encinitas to a more centrally-located office in Solana Beach that would allow staff to work more efficiently.

The construction of a new office on the Earl Warren Middle School site comes with a $20.8 million price tag, which includes soft costs such as an environmental review and parcel split costs and $3 million for furnishings.

The approximate investment needed to secure a construction loan would be $9 million to $12 million.

Rather than sell the existing office building at 710 Encinitas Boulevard, SDUHSD Superintendent Robert Haley said the idea would be to use it as leverage after modernizing it to attract rental office tenants. The approximate investment in the building in order to obtain lease revenue would be $2 million to $5 million.

Currently, the district has just $1 million available in its capital funding coffers.

“The challenge is financing,” Haley said. “The need is there, the location is ideal and we all know the value we could get out of a new educational center. The question is, how can we get there?”

Since fall 2018, San Dieguito has been exploring the potential for a new district office, hiring Ruhnau Clarke Architects to conduct a feasibility study.

Haley said the district’s goals for the office is an environment that is open, transparent and collaborative. At the workshop, the firm unveiled renderings for a building that provided a public reception space, large board room, more opportunities for staff collaboration and professional development as well as wellness components such as a gym and access to the outdoors.

The building would be located on the field space next to Earl Warren, pulled toward Stevens Avenue to make a strong statement as visitors come into the site—the board room would be up front with lots of windows, the idea that nothing is being done behind closed doors, Roger Clarke, president of Ruhnau Clarke, said.

Ideally, the district would build the new office first so staff could move into it before leasing the Encinitas building. John Addleman, executive director of planning services, said a market study conducted showed there is a shortage for medical offices greater than 5,000 square feet in the North County Coastal area which is the use that the 710 building was originally designed for.

“Vacancy rates are low and there is a good demand,” Addleman said. “The existing district office can be converted into a cash-flow generating asset by retrofitting and leasing the property.”

Addleman said there are opportunities to make the space leasable for one big tenant or multiple tenants and it’s estimated they could generate an annual net revenue of $494,000 to $708,000 in rent annually (the district estimates it would pay about $67,000 to $86,000 in building management expenses).

An appraisal of the building showed it could sell in its current state for about $5 million.

The board acknowledged that without securing additional money, they are not able to move forward with the project at this time, however, Haley said they could continue preparing for 159 Stevens so they would not lose any momentum if funding becomes available.

A rendering of the new board room at the proposed SDUHSD district office.

(Courtesy)

SDUHSD Trustee Joyce Dalessandro did have some questions about the scope and scale of the building.

“This is a very glamorous, very big project and I know there will be pushback,” Dalessandro said. “I’m concerned that we have designed something so elegant, so beautiful, so grand that perhaps if we brought it back a little we might lower costs and make it an easier sell.”

“Obviously the central location is a sell,” she said. “Beyond that, I’m not sure how the general population will look at this project.”

Steve Prince, managing principle of Ruhnau Clarke, said the building is fairly “right size” for a potential district office—the Encinitas building is 18,000 square feet and the proposed Solana Beach building is 25,000 square feet with most of that being in the larger board room and professional development areas—staff space did not really grow, just with more efficiencies.

SDUHSD Vice President Mo Muir said it was clear that the district has ambitions about going down the road with the district office project but they have not had any public input. She said while they might support projects that benefit children more directly, she would like to know if the public is aware and if they think a new district office is important.

“We have renditions because we had to have an idea of what we would want in order to find out how much it would cost,” SDUHSD President Beth Hergesheimer said. “But that doesn’t mean we’re building it. Right now, here’s where we got to and now we’re all taking a step back and saying under the current circumstances it’s not happening, it’s not moving forward until we’ve done some other work, which will include how much will there be for us to do something like this.”

At the workshop, the board also talked about challenging decisions it will face regarding future Prop AA projects and additional facilities needs at all district sites.

Of the $449 million Prop AA bond, there is $84 million left to be bonded against, drawing out to 2035. Forty-eight of the 74 identified AA projects have been completed across the district including: the new Earl Warren and Pacific Trails Middle School, renovations at Oak Crest and Diegueno Middle Schools, the new Sunset campus currently under construction to open in fall, the new performing arts center at Torrey Pines High, and the recently opened new classroom building at San Dieguito High School Academy, the second largest in the district.

Projects slated for the last three bond draws in 2021, 2024 and 2035 include projects such as an enhanced administration area and quad at Carmel Valley Middle; a new field house, weight room and converting portables to permanent buildings at La Costa Canyon High School; gym renovation at San Dieguito; a multi-purpose building at the La Costa Valley Fields site; and a new black box theater and engineering facility at Canyon Crest Academy.

The price tags for those projects have changed significantly since 2011 due to construction cost escalation: “We know those numbers aren’t valid,” Haley said, noting that the board will need to revisit some of the project priorities.

There is also additional unfunded needs at all school sites that were not included in the bond project lists, various modernization and facilities improvement projects across all sites. Those needs came out to an additional $134 million.

Moving forward Haley said the board will need to consider updating its facility master plan and consider a feasibility study for another school bond in the November 2020 or June 2022 elections.

SDUHSD Trustee Kristin Gibson said if the district does move forward with another bond, it will involve educating the community about what the needs are and what the classroom of the future looks like, combining a discussion of pedagogy with facilities.

“There is a volcano of research-based best practices in terms of teaching and learning. I think it would be helpful for the community to see some of the connections about when a building is different, different things happen there,” Gibson said. “We know that we have a world that is changing exponentially so how are we going to prepare kids for that.”