Developer offers old school proposal

By BRENT SHRUM Western News Reporter

The Libby School Board will hold a special session prior to its regular monthly meeting next week to discuss a Spokane developer's proposal to renovate the old high school building at the corner of Mineral Avenue and Lincoln Boulevard.

During a phone conference with school board members on Tuesday, ConoverBond Development's Ryan Romaneski reviewed two options for the project, neither of which involves the company's outright purchase of the building.

Romaneski said his company has had a hard time justifying the district's $350,000 asking price on the property, considering the inherent financial risks associated with this kind of project.

"We're not willing to pursue an outright purchase of the building without some creativity on the part of the seller," he said.

Under the first option, ConoverBond and the school district would form a limited liability company with the district contributing the building and ConoverBond assuming all responsibility for renovating and managing the structure. A value for the building would be agreed upon and combined with ConoverBond's financial contribution to determine each partner's stake in the project. Each partner would receive a share of rental income based on that stake until the initial investment was returned, then revenues would be split 50-50.

The district would be "a silent

partner" in the project with no financial liabilities or management responsibilities, Romaneski said. If the project were to fall through, the partnership would be dissolved and the district would receive the building back along with any improvements that had been made to that point, he said.

Under the second option, ConoverBond and the district would enter into a real estate contract with the company making a 10 percent down payment followed by monthly payments with interest until the balance was paid off. The selling price would be based on an independent appraisal of the property.

Romaneski said ConoverBond would need to have some assurance that the district would accept the appraisal paid for by the company or, if it were to reject it, pay for a second appraisal on its own rather than sticking to the original $350,000 asking price.

"I don't want the appraisal to be an exercise in futility and just a hoop that we're going through," he said.

If the project were to fall through, the district would retain ownership of the building along with the down payment and whatever payments had been made to date, Romaneski said.

"So you would essentially come out ahead from an equity perspective," he said.

Board member Jerry Frament asked Romaneski why ConoverBond is unwilling to buy the building outright when that cost would be a small fraction of the expenses associated with renovation. Romaneski said it's largely a matter of "sharing the risk."

ConoverBond plans to remodel the old school with a focus on professional and government office space. Talks are continuing with two private entities interested in the project, one of which is looking at renting the entire building and the other a portion of it, Romaneski said. The Libby City Council has also expressed support for the project and indicated some interest in the potential to move city offices into the renovated school building. But in a small market like Libby, there's always a chance that tenants for the building wouldn't be found or would pull out at some point.

"There's too much risk involved" for ConoverBond to go it alone, Romaneski said.

Romaneski said his firm would like to start work on renovation this spring, depending on how soon a deal could be finalized. The project would take about 12 months to complete, he said.

The board scheduled discussion of the proposal for 6 p.m. on Tuesday, Feb. 21, one hour before the start of its regular meeting.

The old school has been vacant since the Lincoln County Campus of Flathead Valley Community College moved out in 2000. The school board has at several times over the past three years moved toward demolishing the structure while a group organized as Friends of Historic Libby High School has lobbied for preservation. The board rejected a $100,000 offer from Friends to buy the building and set the price at $350,000 when seeking bids last summer. The only bid the district received was a reiteration of the $100,000 offer from Friends. The board has been considering sale of the property to ConoverBond since an initial meeting with Romaneski in December.