School District Rejects HQ Sale-Leaseback Offer

PORTLAND-Portland Public Schools has rejected sale-leaseback proposal from a California firm that would have paid the district $50 million for control of its 200,000-sf headquarters building for 20 years if the school district committed to a 20-year, $90-million leaseback agreement.

The $375,000 annual lease payments theoretically could have been covered by the interest gained on the $50 million, but for several reasons the district says it let the Oct. 11 deadline pass without accepting the offer. One reason cited was that the district could borrow money at a lower interest rate than the 6.6% figured into the proposed lease payments. As well, Multnomah County actually owns a portion of the office space in the headquarters building, so would have to be involved in the deal.