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Originally published Wednesday, January 21, 2015 at 7:44 PM

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Seattle School Board changes tack; to bid on Federal Reserve building

The Seattle School Board voted Wednesday to bid on the former Federal Reserve building in downtown Seattle, two months after deciding not to accept the site for free under strict federal requirements.


Seattle Times staff reporter

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Two months after backing away from the chance to acquire a site for a downtown school for free, the Seattle School Board voted Wednesday to make another try at the building under different conditions.

This time, by bidding on the building in an auction, the district will have more time to ask voters for money to remodel the 65-year-old Federal Reserve building. In the last go-round, the district could have faced fines if it couldn’t turn the building into a school within three years, at an estimated cost of roughly $53 million.

If the district wins the auction, it will have to pay upfront for the vacant site on Second Avenue at Spring Street. The 90,000-square-foot concrete fortress has been vacant since 2008, when the Federal Reserve moved its regional offices to Renton.

School board members aren’t saying just how much they are willing to spend on the structure and land. The Wednesday vote gave Superintendent Larry Nyland and his facilities officer permission to bid up to 10 percent more than the site’s current value, but the district will not release the results of its recent appraisal.

“It’s a competitive bidding process,” School Board President Sherry Carr said in an interview before Wednesday’s meeting.

The online auction has had a slow start, and it comes at the end of a long process by the General Services Administration (GSA) to divest itself of what it considers surplus federal property.

No one has bid on the building since the auction began Dec. 5, according to GSA spokeswoman Sally Mayberry. In fact, the GSA lowered the minimum starting bid from $5 million to $1 million last week.

One other bidder has paid the $100,000 registration fee, but has not yet cast a bid, Richard Best, the district’s director of capital projects, said during a School Board meeting Jan. 7.

Seattle Public Schools first looked to the historic building as a possible elementary school for a growing number of downtown kids in July. That’s when the board voted to apply to get the building for free under a complex federal process for distributing surplus government property.

The U.S. Department of Education returned the district’s application, saying its proposal was too tentative. School Board members voted unanimously against submitting a revised application, saying the district didn’t have the money in hand — about $53 million, by district projections — to turn the building into an elementary school within the required three years.

That’s a little more than the district’s newest elementary schools, which are being built on district land for between $41 million and $43 million each.

Buying the old fed property at auction will relieve the tight timeline, Carr said, allowing Seattle Public Schools time to put a request before voters on the district’s next construction levy, scheduled to appear on the ballot in 2016.

“It’s a great location, a great opportunity for a downtown school,” Carr said. ‘We can make it into a vital and active block in the city.”

The push for a downtown school has drawn criticism from some parents and advocates who point to other parts of Seattle that are more crowded than downtown. Three elementary schools near downtown, they say, are all slightly under capacity this year.

But supporters, including the Downtown Seattle Association, say the location and price are too good a deal to pass up, and the number of kids in downtown Seattle is only going to grow.

Jon Scholes, president and CEO of the association, said buying the Federal Reserve building at auction will give the district flexibility in how and when to build a school.

Bidding ends Jan. 28, and some real-estate brokers have said the site may be a tough sell to others outside the school district. While the property’s zoning allows unlimited building height, historic-preservation rules block developers from demolishing the structure, which is listed on the National Register of Historic Places. Even some renovations would require state permission.

Scholes said the site was previously under contract with a private developer for between about $18 million and $20 million around 2011, but that was before the property was a historic place and developers assumed they could build a new tower on site.

Leah Todd: 206-464-8246 or ltodd@seattletimes.com. On Twitter @leahktodd



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