District to make offer on business school building

by Jim Boyle

Editor

Globe University announced on Wednesday to its students and staff it will be consolidating its operations of its Minnesota School of Business campuses in Elk River, Brooklyn Center and Plymouth at a yet-to-be determined location in the Maple Grove area.

“We are excited to let you know we are in the process of securing a new site for a campus to best serve the needs of students and employers in the Northwest suburbs,” Michelle Knoll, a senior marketing and communications manager for Globe, said in a memorandum. “While the new location will be a change from your current campus and routine, we are hopeful the change will be very positive.”

The announcement comes on the heels of Elk River Area School Board’s decision on Monday to give the District 728 administration the authority to draw up a purchase agreement with Globe University for the 31,200-square-foot Elk River Minnesota School of Business building and its surrounding property located just off Highway 169 and tucked behind a SuperAmerica gas station on 193rd Avenue.

District 728 officials would like to consolidate the district’s administrative staff that is spread across several buildings, provide for a lack of meeting and conference space, and end a four-year search for a new district office in downtown Elk River to replace the office that the district has outgrown.

“We’d like to bring everybody under one roof,” said Superintendent Mark Bezek, referring to the district office staff, service center staff and technology center staff. “The Minnesota School of Business building is much newer, will require less maintenance and make us much more efficient.”

Bezek has been in talks with Globe since this summer, when he learned of its desire to consolidate and sell its Elk River campus site.

“This fell into our lap,” Bezek said. “It’s the closest thing we have found that would meet our needs. It would set us up for a long time.”

School officials have considered partnering with Sherburne County as it moves forward with plans for an expansion of the county government center in western Elk River. It was also previously interested in several buildings in east Elk River. The closest match was the former Maxsun lighting store that Sportech purchased.

District officials even considered shutting down Parker Elementary School a few years ago and reconfiguring that for a district office and other uses but shied away, knowing that the district would be on the grow again someday.

The Elk River business school is about 25 percent larger than what the district needs today, but it would provide room to grow and take on other desired functions, such as a district welcome center or an office campus technology and help center for its online program.

The Elk River Area School District has a $3.5 million capital fund balance, which it could draw down by $1 million and finance the rest of the costs with an annual revenue stream of about $600,000 that it has used to build the fund balance.

Bezek and Greg Hein, the district’s executive director of business services, said they believe they could fund a loan and still have a fund balance and have at least $400,000 to cover capital needs that arise.

Selling the buildings the district would vacate could be used to accelerate payoff, or leasing could be used to help provide a revenue stream for other things, such as the general fund.

“This is a recommendation,” Bezek said of drawing up a purchase agreement with a school district attorney and Globe. “We would like to move forward. This is something that the board has to feel good about. I can’t buy property. The School Board can buy property.”

Most of the School Board members said to go for it, including Shane Steinbrecher, who has crunched the numbers to compare buying this facility to building new space. He concluded the district can get more space this way and have room grow. The other option would be to build onto a building or build its own building and get less space for the money.

Jane Bunting, the former board chairwoman, said her preference would be to look for a building that’s the right size and conserve as many dollars as possible to put more Chromebooks in the hands of students.

Holly Thompson, the new board chair, said she was not in favor of pursuing the business school.

“I have some concerns,” Thompson said. “I was at Sauk Rapids-Rice High School, and they have a district office tucked into the high school. We’ve had construction going on. We could have tucked in a D.O.”

Bezek said he’s not sure where the district could have done that and encouraged board members to consider that the district is likely to grow  its enrollment another 1,000-2,000 students in the next 10 years.

“There are huge advantages to having administrators under one roof,” he said. “We have people scattered because we never took care of the core business,and we’re going to grow. This will set us up for a long time.”

“Based on these numbers, I support this,” Steinbrecher said.

The next step will be working with an attorney to draw up a purchase agreement for district officials and Globe University officials to consider.

The business schools Glove University runs, like many college campuses across the country, have been experiencing a decline in enrollment. The Elk River campus had 500 students at its peak in 2011. There are 127 students currently enrolled at the Elk River business school.

Meanwhile, the Minnesota School of Business will be working to secure land in the Maple Grove area and to work with students currently enrolled to help them finish their programs.

With a new facility taking on three locations, Globe University believes the Minnesota School of Business can create a more robust experience for future students.

School officials there hope that by the end of 2016 or the beginning of 2017, they can move into a new facility.

Classes will be phased out at each of the other campuses as they march toward that date.

“Staff will work with students to develop plans to finish their program,” Knoll said. “Most will be able to finish it at the campus they are currently.”

Knoll said Globe is now in position to have open talks with the Elk River Area School District about its intent to sell.

“It’s a win-win,” she said.