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For many years, the Los Alamos School system could always count on revenues from properties it leases out to area businesses. Those properties were mostly schools that were closed long ago, converted to office space and then rented out to such places as Los Alamos National Laboratory as well as small business.
Lately however, LAPS has been feeling the strain of owning facilities that are aging rapidly in a real estate market that now has more vacancies in it than occupancies.
At a recent School Board meeting, Joanie Ahlers, the chief operations officer for Los Alamos Public Schools, brought this issue before the board in an effort to get the board to regularly reinvest in the school systems leased facilities.
“LAPS leased facilities is one of the Board’s largest areas of responsibility. It is a tremendous source of revenue for the district,” Ahlers said in a specially-prepared report for the board. “Our facilities are aging and very little capital reinvestment has occurred in the past to keep them viable, revenue generating properties. A capital reinvestment strategy is desperately needed in order to maintain the tenants that we have and to increase the possibility to attract new ones.”
LAPS has come to rely on the funds generated from the facilities, which come out to about $2.5 million a year. Most of that money is invested back into various school programs or to help with unexpected expenses. That amount is also due to increase once LAPS starts receiving rent from the new Smith’s Marketplace, which is being built on land LAPS owns.
Board member Jim Hall seemed to agree with this assessment.
“I’ve been long been an advocate of concern about the competitiveness of our leased facilities,” he said at the meeting. “They are becoming increasingly uncompetitive in an increasingly competitive environment.”
He noted that the other major real estate players around town, such as the Los Alamos Commerce and Development Corporation, have already started reinvestment programs to make their properties more appealing.
She told the board members that aside from regular maintenance and upkeep, they should consider investing at least $500,000 a year toward facade upgrades, roof, door and window replacement, additions, air duct and air conditioning replacement.
“LAPS may be in a difficult position due to the change in the rental real estate market,” she said in her report. “There is a surplus of rental property currently available; therefore, the competition is increasing for us. I would strongly urge the Board to consider the concept of reinvesting in our leased facilities and to make it a yearly line item.”
Ahlers’ report also included a specific request for the board to invest approximately $370,000 into the district’s Canyon School property, a site that’s now mostly occupied by a division of LANL.
The board’s vote follows the County’s approval of an additional $700,000 for the project.
The million dollar renovation will mainly include three major areas of repair to the facility, including, a heating and air conditioning reduct of the facility, remodeling of the south bathrooms and a new facade for the building.
According to Superintendent of Schools Gene Schmidt, the hope is that the board will continue to fund investment into the district’s lease properties on an annual basis.
“We will be laying out a series of projects,” Schmidt said. “This year it’s the Canyon complex with Smith Auditorium coming up with other properties to follow.”