CEDAR FALLS — After authorizing plans to borrow $6.08 million last month, Area Education Agency 267 has signed the lease for the Park Place Events Center.
The agency’s board of directors Thursday approved a lease purchase agreement with Branch Banking and Trust Company of Charlotte, N.C. Also known as the Pipac Centre on the Lake, the property at 1521 Technology Parkway will become AEA 267’s new conference center and administrative offices, replacing its three existing buildings on Cedar Heights Drive. The agreement takes effect Jan. 10.
AEA 267 provides special education, school technology, media and instructional/curriculum support to schools in 18 central and Northeast Iowa counties. The Pipac/Park Place building was built in 2005. Its builders and owners, Greg and LeaAnn Saul, were unable to find a buyer to continue operations as an events center. The AEA board in October approved proceeding with the move.
On Nov. 22, directors held a public hearing and approved the winning bid to borrow the money from BB&T Governmental Finance, a division of the North Carolina company.
“That was directing that sale to happen,” said Dave Nicholson, AEA 267’s chief financial officer, referencing the funds needed to buy the building. “These are the actual documents to make it happen.”
The purchase price of the Pipac Centre is $4 million. Remaining funds will go toward remodeling the facility as well as the agency’s Marshalltown and Clear Lake branches plus covering the cost of issuing the overall debt.
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A lease purchase is being done because, under Iowa Code, AEA’s cannot finance building purchases and improvements by issuing bonds since they don’t have the authority to levy property taxes.
“We are actually leasing the facility back from the bank,” said Nicholson. As a result, the agency needs to keep BB&T apprised of its plans to remodel the building before moving in and submit annual audits to the company.
“The term of the lease is 16 years,” said Nicholson. It is scheduled to end after the final semiannual principle and interest payment of $475,343 is made June 1, 2033. However, beginning June 1, 2023, the agency can make larger payments.
“Once a year, we can make an inflated payment of over $500,000,” said Nicholson. “Any additional payments that we make would shorten the lease.” It would also save on the $1.52 million in interest being paid on the borrowed money.
Sale of AEA 267’s current facilities, with a combined appraised value of $5.5 million to $5.8 million, would provide the funds for the larger payments. In the meantime, officials expect the operational savings from moving out of the current facilities to provide the funds for the scheduled payments on the new building.