Funds allocated to improvements of 90-year-old Loloma School

A view of the historic Loloma School site. (Submitted graphic)

Funds are beginning to be earmarked for renovations and improvements on the historic Loloma School property, cutting back on lease revenue provided to local arts programs by the city of Scottsdale.

During a June 12 Scottsdale City Council meeting, elected leaders approved a resolution to equally allocate the revenue generated through Loloma School’s lease agreement for building maintenance and capital improvements and for arts programs within the community.

Additionally, a one-time transfer of $250,000 from the special programs fund center community arts trust to a newly created fund for the school maintenance was approved.

Loloma School, 3720 N. Marshall Way, was home to the city’s second grammar school, and constructed in 1928.

After purchasing the school in 1992, the city of Scottsdale requested bids to lease the property and awarded a lease to the Scottsdale Artists’ School on March 15, 1993, according to a city staff report. The artists’ school is a 501(c)3 nonprofit organization founded in 1983, records show.

The lease was for an initial term of 10 years, with two 10-year options to renew. The lease requires the school to pay the city base rent or a percentage rent equal to 6 percent of annual gross sales, whichever is greater.

In recent years, annual lease payments have ranged from $66,000 to $73,560, the city staff report states.
When the initial lease was approved, the rental revenue was dedicated to arts within the community and a community arts trust was established. To guide use of the community arts trust, staff has been following an approved administrative directive stating funds shall be provided to Scottsdale-based community organizations online.

As of March 31, the balance of the trust was $593,000.

Also within the lease agreement is requirements to maintain the structural integrity of the building, roof, exterior windows, doors, walls, sewer, air condition, heating and plumbing. City staff anticipates substantial expenditures will be required in the next 10-15 years due to the current age of the building infrastructure and systems: ranging from 64-90 years old.

The facilities maintenance department estimates $550,000 to $650,000 in repair or replacement costs for the boiler, exterior painting, windows, electrical and plumbing systems.

The city of Scottsdale has replaced all doors and installed a new HVAC chiller, roof and cupola over the past 10 years, the staff report states. Additionally, the city spends $6,000 on annual routine maintenance.

The initial transfer of $250,000 combined with 50 percent of the annual lease agreement revenues should provide adequate reserves as needed for annual maintenance or capital improvement projects, the staff report states.

Using the proposed 50/50 split of annual lease revenues would provide an estimated $33,000-$36,000 annually for the community arts trust and the Loloma School maintenance and improvements fund. The shared revenues will cut back the funding of community art projects through the trust fund; however, funds have not been used or required as evidenced by the accumulated balance of funds, the staff report states.

Northeast Valley News Services Editor Melissa Fittro can be e-mailed at mfittro@newszap.com or can be followed on Twitter at twitter.com/melissafittro.

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