Newark school board approves $42.5 million lease for new headquarters

The Newark Public Schools Advisory Board approved a $42.5 million, 16-year lease at 765 Broad Street in Newark.

Less than 10 days after failing to muster enough votes to approve a $42.5 million, 16-year lease for office space for Newark Public Schools headquarters, the school advisory board today approved the lease.

With a 7-2 vote, the board approved the lease for 100,000 square-feet of space at 765 Broad Street when its current lease at 2 Cedar Street expires on July 31. The district rents about 99,000 square-feet in 2 Cedar Street, which is owned by Hartz Mountain Industries.

Dashay Carter and Donald G. Jackson Jr., who voted against the lease on Feb. 3, reversed their vote. Philip C. Seelinger Jr. and Crystal Fonseca voted against the lease again.

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District officials said leasing the building at 765 Broad Street would save the district some $2.3 million annually compared with the costs at 2 Cedar Street.

“It is my belief that voting for 765 Broad is a vote for the children of Newark because we understand the financial crisis that we are in,” Carter said during the meeting.

“I understand what the $2.3 million savings means for our students. We could have gone with someone else. However, that would mean there would be budget cuts in the schools,” Carter said. “And we can’t afford that at this point. As a board member I do feel it’s my responsibility to do what is in the best interest of the students of this district.”

Fonseca, who advocated for the district to own a building rather than lease one, said she would not change her "no" vote.

“I personally don’t feel comfortable as a taxpayer in this city with a family that has children in this city,” Fonseca said. “I just don’t see that we’re going to invest money to lease property in the city when we can own property.”

Fonseca said since 2006, the district has spent $50 million leasing property. That cost, added to the new lease, totals a staggering $92 million over 25 years.

“If we’re talking about the future of the city and the future of our kids, we need to get better at making financial decisions that are going to affect everything from the top to the bottom,” Fonseca said.

Central Ward Councilwoman Gayle Chaneyfield Jenkins, who urged the board to reject the lease at the last meeting, said after the vote that the board's reversal is a slap in the face of Newark residents.

“This isn't about the children of Newark, this is about a sweetheart deal for the broker and for the landlord," Chaneyfield Jenkins said. "There is something fundamentally wrong with spending so much money and having nothing to show for it in return. We could have built our own building and created jobs for residents who desperately need work. Instead, we chose to give a landlord who’s not even from Newark $42 million. This is another bad deal for Newark and a tremendous lost opportunity.”

The Berger Organization offered to provide space in a building it owns at 33 Washington Street for $36.3 million over 16-years, or $18 per square foot. Carter said she personally liked the space at 33 Washington, but she cited unspecified “legal issues” that prevented the district from entering into negotiations with Berger.

Hartz Mountain had offered the district a five-year lease at 2 Cedar Street that would have reduced the lease portion from $2.3 million annually to $1.6 million. But district officials said the payments do not include other fees, such as costs for common space, maintenance, and utilities.

“Voting for this property is voting for Newark,” said board member Tave Padilla. “This deal by far is the best for the district. One for Newark public schools, two for the kids and three it keeps a lot of people employed. If we went another way, we would have to make cuts and I think it’s in the best interest of the city and for the kids.”

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