SENIOR WALK – Sitka High School seniors walk through the halls of Xoots Elementary School wearing their graduation attire this morning as they are congratulated by students. The seniors walked through the halls of both elementary schools and the middle school this morning. Seventy-four seniors will be graduating in the ceremony which begins 7 p.m. tonight in the school gym. (Sentinel Photo by James Poulson)
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Daily Sitka Sentinel
Sitka Fine Arts Camp Sorts Out USDA Loan
By TOM HESSE
Sentinel Staff Writer
One of the final roadblocks standing in the way of the Sitka Fine Arts Camp’s assuming ownership of the Sheldon Jackson Campus has been cleared.
In a visit to Sitka last weekend, U.S. Department of Agriculture Housing and Community Facilities Administrator Tammye Treviño announced that she had accepted the transfer of the Rasmuson Student Center to the Fine Arts Camp, along with a Rural Development loan and grant attached to the property.
Prior to the closure of Sheldon Jackson College in 2007, the college had received a USDA grant and a loan for renovation of the student center, Treviño said. In 2011, the Fine Arts Camp took ownership of Sheldon Jackson campus and, with regards to the Student Center, also had to accept the terms of not only the USDA loan but also a $500,000 grant that came with the loan.
Fine Arts Camp accepted the building with the intention of paying off the remaining balance, about $580,000, on the loan, said Fine Arts Camp Director Roger Schmidt. The requirements for the grant and the loan dictate, among other things, that the building be used for educational purposes. That meant that when Sheldon Jackson College decided to give up the building it had to go to a group that was going to use it for education.
Although the Fine Arts Camp met those requirements, it took nearly four years for the USDA Rural Development division to recognize the Fine Arts Camp’s ownership of the loan and, therefore, the building itself.
“When it first came across my desk it came across as an acceleration notice to the college – so basically the college had been in default for many years, which tends to happen sometimes,” Treviño said.
If a loan can’t be repaid, then the USDA has to reclaim ownership of the property.
“We said we really need somebody to pay this loan,” Treviño said.
During the time between when the Fine Arts Camp took over the building and when it officially obtained ownership of the loan, a problem with paperwork took place that Treviño said can happen with such loans.
The Fine Arts Camp tried to gain ownership of the loan while at the same time a preschool renting part of the building was also filing paperwork to the USDA about the loan, Fine Arts Camp board member James Poulson said.
Treviño said the Rasmuson Foundation helped mediate the proceedings. Ultimately, the terms of the loan were changed. Years of interest and penalties that were racked up during the period when ownership was being determined were forgiven and the terms of the loan were altered for a short sale of the loan.
Schmidt said the short sale allowed the camp to pay off the loan for $582,000, which it did through a third party. Treviño said it allowed the USDA to avoid having to take a loss on the building.
“All in all what ultimately happened was the loan was paid off in a short sale and (Saturday) we completed the paperwork on the short sale – which means we took a little less than what was owed. Not much; we think all in all it has worked out well for everyone,” she said.
The agreement guaranteed that the Three to Five Preschool, which was renting part of the building and also filed paperwork with the USDA, got to remain in the building at a favorable lease rate.
“It’s going to be best for everyone so we’re happy. We’re happy with how it all turned out,” Treviño said.
So why did the process take four years to sort out? Treviño said it doesn’t happen often but it does come up from time to time because of the maze of paperwork that can be associated with these types of projects. The important thing, she said, was that they eventually reached the desired outcome.
“Every now and then we’re able to save a project like this by re-purposing it, but the idea is not to have to take it into inventory if we don’t have to. I think it’s been amazing ... It doesn’t happen as many times as we’d like,” Treviño said. “Many times we do have to take buildings into inventory and when we do that’s a loss to the government so any time we can say it was successful and we took minimal loss it’s a win-win for everybody.”
While in town Saturday Treviño took a tour of the building that the USDA had finally cleared from its books.
“I just saw the building (and) took a tour of the camp. They’re so excited to get started. They’ve done amazing work. They have a lot of community support and it’s obvious that they’re going to take care of the building and they’re going to be able to do what they want to do,” Treviño said.
After completing the short sale of the loan on Saturday, Schmidt finished the paperwork for full ownership of the building this week.
“We’re relieved. It took a lot of work. The timing right now is perfect. At our heart what we like to do is serve kids and work with kids and it’s just a relief that we can focus on doing that right now,” Schmidt said.
Schmidt said he did have one fortunate distraction come up that will occupy his thoughts now that the student center is officially property of the Fine Arts Camp. The camp received a $150,000 donation recently for improvements to Allen Auditorium and Odess Theater.
“Right now we received an anonymous gift for $150,000 and we’re really excited about that opportunity,” Schmidt said.
The same donor also offered an additional dollar-for-dollar match of up to $100,000 for improvements.
If Fine Arts Camp can raise $100,000 from the community, then the same anonymous donor would be giving Schmidt a quarter of a million additional things to be thinking about. But, Schmidt said he’s happy that the problem has been dealt with and the camp can retire from the loan-buying business and enjoy another season of arts education.
“At this point it’s going to sound cliche but we’ve had hundreds of volunteers working thousands of hours all winter and all spring so that we can be ready for this year,” Schmidt said. “And the USDA thing for me was just an enormous hurdle and it’s just so great to me to get back to kids and get back to rebuilding the campus.”
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20 YEARS AGO
May 2004
The budget just approved by the Legislature shows Sitka School District may expect a nearly $900,000 increase in operating funds from the Legislature, Superintendent Steve Bradshaw said today. “We’re extremely happy, but we will still have to make cuts in the budget,” Bradshaw said.
50 YEARS AGO
May 1974
Bruce Hays, 14, son of Mr. and Mrs. Hank Hays, spelled his way to the number 10 spot last weekend in the state spelling beer sponsored by the Anchorage Times.