The Pleasanton school board is set to vote on authorizing the purchase of an office building on West Las Positas Boulevard for just under $24 million to serve as the new district office Thursday night.

The need to relocate the Pleasanton Unified School District headquarters from outdated facilities at the district-owned property on the edge of downtown Pleasanton, at 4645 and 4665 Bernal Ave., has been debated by the Board of Trustees publicly for months.

Most of the property that houses the district office, Village High School and the upper Bernal field will be put up for sale if the board moves forward with the new land purchase. About three acres of the current property along with the Bernal upper field, which is under a lease to the city, will still be owned by the district.

The current price the district is set to settle on for the Arroyo Center office building is $23,480,261, according to the district report.

The board on May 12 approved the purchase of the new office building, owned by ECI Four Arroyo LLC and located on 5758 and 5794 West Las Positas Blvd. Since then there have been two amendments added that the board will review this Thursday.

After both the district and the property owners reached the purchase agreement the district was presented with an updated lease agreement for the sole tenant currently renting a portion of the Arroyo Center, electron microscopy firm Gatan Inc. -- which would make the district the landlord of the lease going forward after escrow closes on the purchase.

The first amendment includes an agreement to extend the term of the lease, provides for a landlord contribution toward the cost of tenant improvements such as repair work to the building and cancels the option to extend the lease.

"The district approved this lease amendment as it would improve the building for the district's potential future use, increase the annual lease rent amounts and convert the lease to a triple net lease," the district report reads.

A triple net lease is an agreement on a property where the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance and maintenance.

According to the district report, the agreement was to ensure the district will not have to pay any costs arising from correcting violations in any existing building under the Americans with Disabilities Act, amongst other modifications.

The second amendment the board will be reviewing includes a letter from ECI Four Arroyo LLC that outlines the approved plans for improvements and modifications that will be done to the building.

It also includes a $100,000 reduction to the purchase price following negotiations between district officials and the seller resulting from discoveries made by the district during its due diligence investigations.

According to the Arroyo property inspection and financial report, which contains information about the investigation, tenant improvement planning and costs, property and land usage and financial information, the building is overall in good shape but does have some heating and air conditioning units that need to be replaced along with the building's roof which has reached, "the end of its useful life and should be replaced within two years."

Despite the property costing over $23 million, PUSD director of communications Patrick Gannon said that if the board approves this purchase the district will focus on putting the property where the district office is currently located, up for sale.

He said that the seven acres of land the district is planning to sell if the purchase agreement is approved has already been estimated in value between $31 million and $34 million, something that he said matters when looking at the overall bigger picture.

"There is a potential profit," Gannon said. "There's a lot of work that we'd have to do to get our current property for sale but having office space on property that's worth that much when we could buy a property that's worth you know, potentially $9 million less."

There is also another lease under the property that would have to pay the district rent every month from now until 2027. The company will begin paying the district about $80,000 starting next year. Gannon said that will just add more money to the district budget.

As for what will happen to Village High School, as of now the district report states that it will plan to rebuild and reconfigure the school on the remaining three acres it will continue to own. The rest of the current office space near downtown is being reviewed by the city to be potentially used for affordable housing.

That coupled with the future tenant payments from the new potential site will be used to pay off the $23 million used to buy the new space as well as using certificate of participations, which is a type of financing where an investor purchases a share of the lease revenues of a program.

In other business

* The board will be reviewing and possibly issuing a notice of completion for the construction of new classroom buildings at Foothill and Amador Valley high schools.

Board members approved the construction of these new buildings as part of the Measure I1, a $270 million general obligation bond that voters passed in 2016 to help address facility needs, safety and building modernizations.

The notice also comes with a final change order representing the negotiation of all final costs on the project. According to the district report, including that final change order the total final project cost was $18,402,045, which is within the project budget.

The majority of the change order is related to extending the time of construction for both projects because of several updates that came from either the pandemic or general enhancements that were made midway through the projects.

"During the course of the project, there was new guidance regarding operable windows related to the COVID-19 Pandemic. Subsequent to this new guidance, the district elected to change several windows in the classroom building from non-operable to operable in order to allow for more fresh air into the classrooms," the district report reads.

The Foothill project also added electrical and other upgrades to the classrooms but now that it is all done, the board just needs to sign off on the projects this Thursday to make the completion of both projects official.

* Board members will have to vote on allowing Superintendent David Haglund a one-time delegation of authority to approve a bid to pay for the second phase of updating the Foothill High School stadium.

On May 26, the board approved a two-phase plan to upgrade pathways to the sports fields at Foothill to comply with the ADA.

The first phase, which is already underway, will create two new ADA-compliant parking spots near the baseball field, a walkway from those parking spots to the field and an ADA-compliant walkway from the nearest ADA-compliant parking near the tennis complex to the front entry of the stadium.

The second phase of the project is currently not funded and the facilities and construction team is bringing this item for the board to approve so that when the bidding for the construction is done, Haglund can sign off on the agreement.

Phase two of the construction will work inside the stadium to build a switch back ramp leading to the lower field, ADA seating, and providing accessible walkways.

With Haglund signing off on the agreement, rather than having to wait until the next board meeting cycle, district staff said in the report that it will speed up the process and get the project done sooner.

Funding for this project is coming from the district's Fund 40 capital improvement fund and a donation from We Are Pleasanton, which has raised $250,000 toward the project.