A proposal to sell Enumclaw School District land to fund the construction of a new elementary school was recently presented to the school board.

On Oct. 6, Denise Stiffarm from Pacifica Law Group gave a short presentation on the potential agreement between ESD and Oakpointe, the developer of the Ten Trails neighborhood in Black Diamond.

In short, the district would sell a 40 acre parcel of land to Oakpointe for $40 million to fund the construction of a 550-plus student elementary school.

Additionally, Oakpointe will also finance $25 million for the project, to be repaid via mitigation fees.

This is a highly unusual agreement, as developers typically do not provide funds for public facilities in this fashion. That said, Oakpointe has a vested interest in this project as well.

“This is a truly unique agreement we’ve been working through with the Enumclaw School Board. We’re not aware of any other examples where developers have provided funds for public facilities in this way – but this is logical, it benefits everyone, and it’s the right thing to do,” Oakpointe spokesperson Tyler Pichette said in an email. “Constructing a school on this empty, 12-acre parcel in the middle of Ten Trails will invigorate the community and provide a much-needed resource. And it will be another great selling point for this growing city.”

“The proposed amendment to the Comprehensive School Mitigation Agreement is an exciting opportunity and reflects the foresight of previous Enumclaw School District Boards and administrators who ensured school sites were included in the original agreement,” ESD Communications Director Jessica McCartney said. “That proactive planning has now enabled the district to consider this unprecedented route for constructing a new elementary school within Ten Trails.”

Here’s some history that leads us to this point.

With the Ten Trails neighborhood making Black Diamond one of the fastest-growing cities in the King County, the Black Diamond Elementary school has reached capacity, and dozens of students are bussed from the city into Enumlaw-area schools.

To manage the growing population, ESD in February 2023 proposed a $253 million bond that would have funded the construction of a new elementary school in Black Diamond.

The proposal — which would have also funded a new elementary school in Enumclaw and a new sports field, and a new performing arts center — was rejected by a record 75% of voters.

A second bond proposal in November 2023 also failed to muster enough support from voters, forcing the district to look elsewhere for funds.

The only viable option, it appears, was to go to Oakpointe.

Meanwhile, the developer was having issues of its own, as numerous factors — perhaps including the lack of a second school — have kept the Ten Trails neighborhood from growing at desired pace.

“Development in the Ten Trails area has occurred at a slower pace than we’d originally anticipated, due mainly to higher interest rates and general economic factors,” Pichette said. “We do expect that a new school will attract new residents to the area. It is well-established that homebuyers often make buying decisions based on area schools, with elementary schools offering the greatest benefit by attracting young families moving to an area for the first time.”

Discussions about how ESD and Oakpointe could help each other out began in June 2024.

Both Oakpointe and ESD believe a school can be built with these funds.

THE DETAILS

According to Stiffarm, the proposed agreement means the district would release its interest in a 40 acre parcel of land for $40 million, in cash.

The parcel was previously set aside for district use for a future high school, but more recent student population projections show that Enumclaw High will not reach capacity for years to come.

The district would also release its interest in an adjacent auxiliary site in exchange for another.

But the most unique part of this agreement is that Oakpointe is financing $25 million for the construction of a school.

“I’m sure that I don’t have to tell you that $40 million is not going to build you an elementary school, so we wanted… to make sure there was enough developer resources there that the school can be built,” Stiffarm said.

The district must first use the $40 million before it can utilize these other funds, and there would be a 6% interest rate on drawn funds.

ESD would then pay Oakpointe back through school mitigation fees.

“Right now, as each unit is constructed, the builder pays a mitigation fee [to Black Diamond], the city transfers that to the district, and there’s an account where that is all held,” Stiffarm continued. “That money will be the source and sole source of paying that $25 million to the developer.”

The district would continue to repay Oakpointe until its development agreement with ESD ends.

However, if the full debt isn’t paid at that time, Oakpointe will clear ESD’s debt to the developer.

“There’s security there for the district that no other district funds will ever be touched to repay that $25 million, and there’s risk on the developer that they never get enough in terms of mitigation fees to fully repay that $25 million,” Stiffarm said. “Though I think they’ve done the math and feel fairly confident that their buildout over a period of time will get them dollars back in.”

No other district funds can be used to repay Oakpointe.

“This structure provides a secure and predictable funding pathway for school construction while maintaining fiscal responsibility and local control of the project,” McCartney said.

SPORTS FIELDS

In addition to the $65 million for a school, Oakpointe is also providing an additional $3 million specifically for one all-weather baseball field and one all-weather soccer fields.

Under the proposed agreement, ESD would not be required to repay Oakpointe for these funds.

However, the city of Black Diamond and ESD would have to share the fields — the district gets priority on school days and events, while the city gets priority all other days.

ESD would also pay for operation and maintenance, but the cost will be shared by Black Diamond.

FUTURE ACTION

This presentation was just to catch the ESD Board of Directors up on the agreement, and the board does not expect to take action at this time; Stiffarm didn’t give a set date, but said action could be made “maybe in a month or two.”

The city of Black Diamond also has to review and approve of the proposal, and it is currently not on the city council’s agenda.