Marysville schools, city could swap old City Hall for district HQ

MARYSVILLE — A proposed property trade between the Marysville School District and city of Marysville could fetch the district $2 million — money that could go toward urgent building upgrades as the district deals with an ongoing funding crisis.

Under the proposal, the city would move its public works department into the school district’s headquarters at 4220 80th St. NE, while the district would move to the former City Hall building at 1049 State Ave. The district would start moving into the old City Hall on June 1, 2025. The city would wait until Jan. 1, 2026 to begin moving into the district property.

In the coming weeks, the district and city will hold two open houses to answer questions about the plan.

On May 13, the school board and City Council will vote on a property exchange agreement after a public hearing.

The former City Hall was appraised last April at $3.83 million, according to a proposal prepared by the city and school district. The city would also “construct an addition to the building and install new siding for the entire structure.”

In late 2022, Marysville moved its City Hall into the new civic center at 501 Delta Ave.

The district headquarters was appraised at $8.6 million in August, but the city would purchase the property for 10% more, or $9.46 million.

Under the proposal, the city would pay the district $2 million for the property, making up the rest of the value via the property transfer and the planned upgrades to the old City Hall.

The district would continue using a warehouse on the headquarters property under a “zero-cost lease” with the city lasting 25 years, with the possibility of extending it up to 25 more.

In recent years, the school district has been plagued by financial challenges, facing a $5.9 million budget deficit as of late January.

A double-levy failure in 2022 dealt the district a crushing blow, though a pared-down four-year levy passed last year. Money from that levy didn’t start coming in until this month.

To cover payroll last year, the district borrowed $5 million from its capital fund, which it must return with interest by this November.

The district’s general fund, which carries the deficit, is separate from its capital fund, district spokesperson Jodi Runyon explained in an interview, acknowledging the loan from the capital fund can lead to some confusion.

The profit from the property exchange will go into the capital fund, meaning the money can’t be used to cover day-to-day operations, she said. Similarly, the district can’t use levy funds to cover building improvements and repairs.

The $2 million cash infusion, along with a $3.6 million grant from the state’s “Distressed Schools Fund,” would be used for pressing facility upgrades.

Those projects include replacing boilers, fire alarm panels, electrical systems and roofs at various schools. The district estimated its high-priority capital projects cost about $6 million. It needs about another $9 million in building upgrades on top of that.

Along with the financial boost, the exchange with the city would “result in a more updated and efficient facility” for the district, the proposal said, noting it would reduce “future costs and maintenance at no additional cost to taxpayers.”

Large portions of the school district headquarters are currently going unused, according to the district.

The trade would also bring district staff now housed in separate facilities at the administration property all into the same building, improving “efficiency and communication,” the proposal states.

The proposal added the move to the former City Hall “will increase public visibility while being more customer-friendly for students’ parents, District partners, and the community.”

The deal is “a great opportunity for the school district,” Runyon said. “We would not have been able to make this type of move if we had not come together with this type of an agreement.”

Meanwhile, moving the public works department would spare the city from having to build a new facility, a project that could cost up to $76 million, the proposal said. The current building, on 80 Columbia Ave., sits in a floodplain.

Marysville’s $73 million waterfront development plan depends on filling in the Public Works site so it’s above the floodplain. That means the department must vacate its current property, according to the city.

Warehouse buildings on the district property, which another buyer would likely find “worthless,” are valuable to the city, explained Gloria Hirashima, the city’s chief administrative officer, “because they’re the types of buildings that our operations require.”

The city will likely make upgrades on the site, she said, but officials consider the property “essentially move-in ready.”

“Yes, it’s not a new facility,” Hirashima acknowledged. “But it provides a great starting point and base for our operation.”

Information sessions about the proposal are set for 5:30 to 6:30 p.m. Thursday, May 2, and 3:30 to 4:30 p.m. Monday, May 13. A public hearing will take place at 5 p.m. May 13. All of the events will happen in the council chambers at the Marysville Civic Center, 501 Delta Ave.

Correction: A previous version of this article misstated how much money the school district estimated it needs to spend on building upgrades.

Sophia Gates: 425-339-3035; sophia.gates@heraldnet.com; Twitter: @SophiaSGates.