Continuum of Services for Students with IEPsWhy is MMSD purchasing the Holtzman Property?

Throughout the 2018-19 school year, the Board of Education expressed the need to provide a more adequate learning space for special education programs that are showing positive potential for students. Based on detailed discussions regarding the programming options we had available, the number of available seats in the program, and reviews of program waitlists, the Board set into reserves approximately $5 million from the closing of three tax increment districts (TID #27, #32, and #43) to purchase a permanent location for the special education programs, credit recovery and alternatives to expulsion that currently are placed in a $243,000 leased space at Olin Avenue. 

The intent of the purchase as discussed with the Board at the time, was to: a) create a permanent owned space that could be invested in in order to meet the needs of the students in the program; b) to reduce our $243,000 annual lease expense that currently pulls from our IDEA special education budget thus freeing up recurring IDEA resources for special education students; and c) allow for wait-listed students to be accommodated. 

At the time, there was also a desire for the potential purchase of a building to address one or two other long standing facility needs in the district, specifically the need for permanent professional development space to reduce district costs for renting professional development space, community meetings, and ACT testing (approx. $100,000 of total costs). 

Here is more information that was provided to the Board in its recent meeting (12-16-2019) leading up to the decision to purchase the property:

Is the Holzman property being used as a school for special education students? Is MMSD creating a new segregated program for special education students?

No, the district is  not creating a new segregated program for our special education students.  MMSD remains committed to highly effective inclusive education,  and our work with schools and the support we provide them lives this vision everyday. 

MMSD is hoping to move a very limited number of students from a current leased space on Olin Avenue to a much better environment for our students that is designed with our students and their needs in mind.  These are not new programs; some have been around for a number of years having to move where space has been available. We are pleased that almost all students in MMSD that need therapeutic or residential treatment programs can be served in their home district.  For additional information please see Intensive Intervention Programs.

What programs are being added with the purchase of new, segregated programs? 

There are no new programs being considered at this time. Currently the four intensive intervention programs at the Olin site include:  – Next Steps, Neon, Primary Steps, and Restore. These programs offer smaller, highly personalized learning environments to meet the unique needs of specific student groups, including middle-school aged students with disabilities who are experiencing emotional and/or behavioral challenges (NEON), students grades one through eight with disabilities and co-occurring mental health challenges (Primary Steps and Next Steps), and students recommended for expulsion (Restore) or need an alternative educational environment.  For additional information please see Intensive Intervention Programs.  

Does Federal Law prohibit segregated programs?

Federal and state law requires programming for all students be conducted in their least restrictive environment.  MMSD understands that for a very limited number of students a small environment is their least restrictive environment (LRE).  (Less than 2% of MMSD students with a disability). The district  uses a very comprehensive/careful approach that involves families when considering the decision for restrictive programs and exhaust all options first as well as balance the needs of students with space availability.  Parents want to have access to a therapeutic day option. Many students in the intervention programs (approximately half) spend part of their day within their neighborhood school. 

Does MMSD send students to other programs in the state or area? 

The Olin programs enable the district  to retain our students within district and not use residential placements. In extremely rare occasions and in agreement with parents, we have placed students placed outside of MMSD because of the need for further continuum of services than we could otherwise provide in MMSD.

Wouldn’t the funds be better spent on staff?

Purchasing the building will allowMMSD to reallocate over $240,000 dollars per year out of the Special education budget back to services for special education students, as well as approximately $80,000 out of the general fund to pay for building operating expenses on a leased property which can be used for the operating expenses of the new building, which the district would own. The district does not pay property taxes, does not pay capital gains tax, and would not take on any interest expenses related to this purchase making this a financially positive decision for the district in the long run. It is also not likely the property will decrease in value.  In fact, it is likely to increase in value and could potentially be sold in the future as the area becomes more developed. 

Did the board first start talking about this property in closed session?

The board has been discussing getting out of leased space at Olin and reducing expenses related to professional development for the past couple of years.  Please access agendas, presentations and videos from the following open session meetings to support the statements made above.  Please remember the replacement of the Olin facility was part of the open Budget discussions and the open Long Range Facility Plan open discussions. Links for more information:

Related Budget Links

What discussions did take place in closed session? 

As you might expect, the board would not consider negotiations in open session.  To do so would be irresponsible and alert the seller helpful information and potentially harm the district’s own negotiating position. 

What has been the parent input?

Parents have participated in the Special Education plan input and developing the special education plan. MMSD has heard loud and clear from parents that we needed a therapeutic day option for students with mental health needs. This need was recognized and acted upon through the creation of Primary Steps and Next Steps.

Why don’t you lease the space at Holtzman while the special education plan is underway?  

The MMSD board provided clear direction about getting out of leased space.  They also provided specific requirements, such as a playground and other special spaces such as for cooking and for individual therapy that wouldn’t be available in a leased space.

What is the purchase price of the building? What is the length of the return on the investment? 

The building was purchased at $4,000,000, below asking price.  It is estimated that this investment would have a payback period of less than 20 years on a building with at least 40 years of use available. 

How is the purchase being funded?

The funds were generated from  one time revenue sources from the closure of multiple Tax Incremental District (TID) payouts that together are just under $5 million. TID closing payouts happen occasionally and it is rare that multiple close at once.  It has been a practice of the Board for about six years to use these one time revenues on one time projects with distinct beginnings and endings that work towards the district needs (playgrounds, all gender bathroom, etc. have all been accomplished with the focused use of TID fundings in the past).  It would not be fiscally responsible to use one time revenue for recurring expenses. The funds could not be spent on salary and recurring expenses.  

The money MMSD would save on annual  leases to both replace the Olin site and the use of external rented space for PD (and other uses such as community meetings and ACT testing) are funds that could be reallocated for other more student driven recurring purposes. This idea was discussed and confirmed within two cycles of the budget process over the past 2 years.

Can the same outcomes be achieved in an existing school(s) where significant space is available?

MMSD does have space in some of our buildings.  However, there have been multiple examples where the district has moved student programming into any available space, regardless if the need of the students fit that space. This is a practice the Board and Administration would like to reverse.  The needs of the students and the programs should come first, and where the district has space to fit those needs it would place students. In this case, a therapeutic day option for students with special needs could not be met within any of the currently available space MMSD has available. 

Another consideration is that while the programs are for small numbers the students do come from all over the city.  Having them centrally located cuts down on the transportation time for MMSD students. With the upcoming referendum the district is pleased to note that both the Board and the Administration are not placing alternative programs in spaces that happen to be available, but rather thinking proactively about the types of space they need.  

MMSD does have some programs in schools.  For example LEAP, an intensive intervention program is located in 3 elementary schools. Finally, by state and federal disability laws districts, including MMSD must provide a continuum of educational options to offer a free appropriate public education.  IEP teams determine the student’s least restrictive environment (LRE) based on many factors and justify when a student is not educated with the peers in their home school. The programs MMSD provides at Olin and proposed at Holtzman are based on each student’s disability related need and are more restrictive but temporary placements for very few students (approximately 25 - 30). Finally, as mentioned before most of the students are not spending their full day at the site.

What is the timeline for the purchase and use of Olin Avenue? 

MMSD  plans to close on the purchase sometime in February/March and then begin a design phase of the project.  We will use MMSD trades staff for the majority of the remodel. The district would expect to start using the facility in the fall of 2021 just after its lease expires for the Olin Avenue site.