The Duluth School Board voted unanimously Tuesday to list Historic Old Central High School for sale.
School district administration asked the board to list the building for sale to see what interest is out there from the private sector.
In June 2019, a facility assessment team of three outside companies presented to the board an estimate of what needed to be done to bring the building up to code and how much that would cost. The board was told it would cost about $24 million to fix the exterior, about $11 million for interior upgrades and repairs and another $13.5 million for system repairs and replacements — a grand total of $48.5 million.
District CFO Cathy Erickson said the resolution is a procedural item and it doesn’t mean the board will approve selling the building.
If the district finds that no one is interested in the building, then the resolution also gives the administration authority to begin looking into financing options to repair it.
District staff has been working since November to collect data for the School Board, including square footage needed by the district if it were to leave Historic Old Central; estimates on funding required to move to a different location; what’s available that would fit the needs of the district and if there isn’t anything available; and what adjustments would be needed to make a space work, if possible.
If the School Board decides in the long run not to sell Historic Old Central to a private developer but to keep ownership of the building in the district's hands, the district has very limited options to repair the building.
Erickson said the district could use long-range facilities money to repair the building by selling bonds and then paying the bonds back with the long-range facilities money. Unfortunately, she said that specific money has limitations and the district would not be legally allowed to pay for all of the $48.5 million in fixes identified in the facility assessment. All repairs and plans would have to be approved by the Minnesota Department of Education before any money is spent.
"The long-range facilities money can only be used on items that are broken or in disrepair," she said. "It can not be used on anything that would be considered new construction or an upgrade."
Erickson said the district does have the option to ask the voters to approve a referendum that would allow the district to bond out for funds to repair the building, but she said if the district were to do that, the ask would most likely be more than the $48.5 million to make the building usable for what the district would use it for. Any referendum passed by voters regarding the building would raise property taxes.
Historic Old Central opened in 1892 and was modeled after the Allegheny County Courthouse in Pittsburgh. The Richardsonian Romanesque-style school was designed by Emmet S. Palmer and Lucien P. Hall.
The building served as a regular high school until 1971 and was placed on the National Register of Historic Places a year later. Even though the building is on the register, the district doesn't qualify for historic tax credits if it maintains the status quo.
If the district were to sell the building to a private developer, that developer could qualify for federal and state tax credits as long as the building produces income, like leasing apartments or offices.
The building is also located in an opportunity zone — an area that is identified as economically distressed where new investments, under certain conditions, may be eligible for preferential tax treatment through the federal government.
Those currently in the building include district administration, the Area Learning Center and Academic Excellence Online High School. A nonprofit, Companies to Classrooms, also occupies space.
The district's Central High School, located at 800 E. Central Entrance, is listed at $7.9 million. The 77-acre property with a hilltop view of Lake Superior has been on the market for more than seven years.
In a recent property update letter to the district, commercial real estate broker Greg Follmer said feedback on the newer Central from potential purchasers has indicated a very low purchase price compared to the listing price, with a potential offer ranging from $1 million to $2 million.