Deal struck to retire million-dollar-plus debt at Peaslee Tech; county taxpayers likely will pay the bill
With a more than $1 million balloon payment looming at the end of the month, leaders with the Dwayne Peaslee Technical Training Center confirmed they’ve reached a deal to refinance the center’s mortgage. But the agreement also may require county taxpayers to pay the vo-tech school’s debt for the next seven years.
Twelve local financial institutions have stepped up to refinance the Peaslee Center mortgage, which was used to help remodel and equip the building near 31st Street and Haskell Avenue that houses the nonprofit school. Word of the deal comes as Douglas County is scheduled to provide a $200,000 check to Peaslee Tech to help pay down the mortgage. Commissioners committed to the mortgage payment last summer when they approved the 2018 budget.
Hugh Carter, vice president of external affairs for the Lawrence chamber of commerce, said the county payment reduced the amount Peaslee Tech owes on the mortgage to $1.375 million.
During the County Commission’s budget discussions last summer, Carter reported he was working with local financial institutions on a plan to purchase the mortgage. On Tuesday, he said a group of 12 institutions, led by Emprise Bank, have agreed to purchase the mortgage before its balloon payment comes due Jan. 31. The 12 financial institutions would refinance the debt with a seven-year loan that has an annual $200,000 principal payment, he said.
That annual principal payment is the same as the county’s 2018 payment on the debt. Carter said it was hoped the County Commission could continue to provide that amount annually until the mortgage is retired.
“Hopefully, the county can do $200,000 annually for seven years, and this note goes away,” he said. “That’s a good solution for Peaslee Tech’s sustainability.”
Douglas County Administrator Craig Weinaug said the county was kept informed of the loan developments and was aware of the assumption the county would continue contributing $200,000 in annual principal payments. He said commissioners support the annual payment, but noted the County Commission could budget the payment only on a year-by-year basis.
“It is my intention to make that recommendation, and it is the commitment of this commission to follow through with that commitment,” he said.
Douglas County Commission Chair Mike Gaughan said he agreed the annual payment was an appropriate county commitment because of the important role Peaslee Tech played in the county’s workforce development.
“Speaking for myself, I’m certainly going to be there to support we follow through on that,” he said. “There is a shared city-county agenda to make sure Peaslee is a success and keeps its doors open for the students and employers of this county. We may end up taking different roles to make that happen, but I think the county, city, school district, business community and county employers are all rowing in the same direction.”
During last summer’s budget hearings, the city of Lawrence was asked to make a payment to help reduce Peaslee Tech’s mortgage. City commissioners denied that request; however, the city does provide funding to help support Peaslee Tech’s expenses to operate classes and other programs.
The mortgage developments come as Peaslee Tech is experiencing an enrollment boom. Kevin Kelley, who succeeded Marvin Hunt as executive director of Peaslee Tech in October, said the school had an enrollment of 548 students for fall programs. That exceeded the 400-student fall enrollment that Hunt predicted at the start of the fall semester.
“Peaslee became approved by the Kansas Board of Regents this fall as a post-secondary institution, and we started adding new programs after that,” he said. “We had some new programs that boosted us up well beyond what our original projections were.”
The automobile technology program Johnson County Community College is now offering at the tech center contributed to the enrollment boost, but it was the new programs Peaslee Tech added with its own instruction that were behind most of that growth, Kelley said. Those included programs in commercial truck driving, pharmaceutical tech, CISCO computer networking, an apprenticeship in industrial maintenance and increased training at county businesses, he said.
That’s good for Peaslee Tech’s bottom line because the school keeps the tuition paid for the programs it offers, Kelley said. The tuition students pay to enroll in programs JCCC, Neosho County Community College and Flint Hills Technical School offer at Peaslee Tech stays with those schools.
Kelley said he’s still looking for opportunities to add programs that will land students jobs in the county. The tech center currently is installing equipment for a new machine shop program and developing a plumbing and facilities management program, he said.
In partnership with the Kansas City and Topeka Apartment Association, Peaslee Tech will start in February a program that will earn graduates certifications as apartment maintenance technicians, Kelley said.
“We’ve had significant growth in enrollment and programming,” he said. “I’m particularly pleased with the programming we’ve added on our own, which really helps us from a revenue standpoint.”