BOARD OF REGENTS BRIEFING PAPER. 1. Agenda Item Title: GBC Pahrump Property Exchange Meeting Date: March 1-2,2012

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1 BOARD OF REGENTS BRIEFING PAPER 1. Agenda Item Title: GBC Pahrump Property Exchange Meeting Date: March 1-2, BACKGROUND & POLICY CONTEXT OF ISSUE: NSHE owns a High Tech Center (HTC) building in Pahrump, located on the Pahrump Valley High School campus. This building currently serves as the Great Basin College (GBC) Pahrump campus and is a shareduse facility with the Nye County School District (NCSD). As the principle facility for GBC in Pahrump, the HTC has certain adverse qualities which inhibit GBC from fully pursuing its mission in Pahrump. Also located in Pahrump is the now-closed Mt. Charleston Elementary School campus (MCES) owned by NCSD. In many respects, the MCES site would provide a superior location for GBC to locate its campus and conduct its business. It would be an advantage to both GBC/NSHE and to NCSD to exchange the Pahrump HTC for the MCES campus. 3. SPECIFIC ACTIONS BEING RECOMMENDED OR REQUESTED: It is requested that the Board of Regents approve a direct exchange of the Pahrump HTC for the MCES campus (including the property) owned by NCSD, subject to other limited negotiated conditions and approval by the Chancellor. (It will also be necessary for the NCSD Board of Trustees to approve the exchange.) 4. IMPETUS (WHY NOW?): The MCES campus was closed by NCSD in June, 2011, and GBC only subsequently learned of its potential availability. GBC requests approval to acquire the MCES campus through exchange at this time to facilitate a timely move to the facility. GBC wishes to make the move during the coming late spring and summer to be ready to run classes at the new site for the fall semester, BULLET POINTS TO SUPPORT REQUEST/RECOMMENDATION: -To be more effective in delivering higher education to Pahrump and Nye County, GBC needs a campus with a unique location and identity, separate from the high school. Having a unique identity, a campus feel, and separation from the high school atmosphere are extremely important points. - The HTC has very limited parking, leading to large volumes of street parking and safety issues, particularly at night. The MCES campus has abundant parking. -Because of the shared-use lease agreement for the HTC with NCSD, NSHE will lose all interest in the HTC at expiration of the current 48 year lease. There are about 34 years remaining on the lease. -With acquisition of the MCES campus, NSHE/GBC would have full ownership of a tangible asset for current and future use with fewer restrictions. -The location of the MCES campus is appropriate for GBC purposes. -There are more square feet of space at MCES (43,000 sq. ft. as opposed to 33,000 sq. ft. for the HTC). Much is in modular units that can be closed down when not in use to save utility costs. There is more and better office space and a better administrative/reception area. - Space at MCES may be dedicated to specific uses without needing removal of instructional items between classes. - There is a large permanent gym/cafeteria building that could be well utilized for several purposes. -The MCES campus includes almost 11 acres of property that would be available to utilize; the HTC occupies most of 1 acre of leased land with no opportunities for other uses. -Appraisals of the two properties (cover sheets attached) indicate the value of the MCES campus being Revised: June 2010 (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 1 of 9

2 sought is about $1.9 million, and the appraised value to GBC/NSHE of its shared-use interest in the HTC is about $1.2 million. GBC/NSHE receives a higher value than it is giving up. -Completion of the proposed exchange will not discontinue collaboration with the NCSD (such as offering dual credit courses), and may enhance opportunities. - The MCES campus provides greater opportunity and flexibility for development and expansion of programs in Pahrump and Nye County. -Ownership of the MCES campus may allow GBC to drop or reduce an existing lease of another facility in Pahrump. -It would be to the advantage ofncsd to have complete ownership and oversight of the HTC, which is located completely on land of the Pahrump high school campus. 6. POTENTIAL ARGUMENTS AGAINST THE REQUEST/RECOMMENDATION: -Most of the space at MCES is in modular units rather than permanent structures, which may be either a favorable or negative factor. -There will be some inconvenience and one-time expense to move to the MCES site (a distance of about 2 miles). Relocation of computing and interactive video equipment and capacity will be required. (A nonstate account would be used to cover expenses associated with the move.) - The MCES site will require exterior and grounds maintenance not required at the HTC. - There will need to remain some lesser amount of agreed shared use of certain rooms in the HTC after an exchange. This is for GBC to carry on instruction needing certain facilities and equipment, such as for science labs and Certified Nursing Assistance instruction. -Exchange of the two properties will be contingent upon approval of both the NSHE Board of Regents and the NCSD Board of Trustees. - There will need to be negotiated details for the transfer and transition period. 7. ALTERNATIVE(S) TO WHAT IS BEING REQUESTED/RECOMMENDED: -Retain the current arrangement for the use and ownership of the HTC. - Lease the MCES campus from NCSD in addition the having the shared-use HTC. 8. COMPLIANCE WITH BOARD POLICY: 0 Consistent With Current Board Policy: Title # Chapter # Section # 0 Amends Current Board Policy: Title # Chapter# Section # 0 Amends Current Procedures & Guidelines Manual: Chapter# Section # 0 Other: 0 Fiscal Impact: Yes No_X_ Explain: Operating costs for the Mt Charleston campus are anticipated to be about the same or less than those for the High Tech Center. Relocation to the Mt Charleston campus may also allow GBC to drop or reduce an existing lease of another site in Pahrump. Revised: June 20 I 0 (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 2 of 9

3 A SELF CONTAINED APPRAISAL REPORT OF The Former Mount Charleston Elementary School OWNED BY Nye County School District LOCATED AT 1521 East Idaho Street Pahrump, Nye County, Nevada FOR THE PURPOSE OF Forming an Opinion of the" As Is" Market Value DATE OF REPORT PREPARED FOR Mr. Michael J. McFarlane, Ph.D. Vice President for Academic Affairs Great Basin College 1500 College Parkway Elko, Nevada APPRAISAL COMPLETED BY LUJB\A WY {]j A OCJ[A TE, J[NC South Durango Drive, Suite 100 Las Vegas, Nevada Phone: (702) Fax: (702) File # S. DURANGO DRIVE, SUITE 100, LAS VEGAS, NEVADA PHONE (702) FAX (702) (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 3 of 9

4 JUUUBL~ \\VY &f A OCJ[A TJE t J[NC. REAL ESTATE AlP'lPRAJ[SERS AND CONSULTANTS Mr. Michael J. McFarlane, Ph.D. Vice President for Academic Affairs Great Basin College 1500 College Parkway Elko, Nevada File # Re: A Self-Contained Appraisal Report of The Former Mount Charleston Elementary School located at 1521 East Idaho Street, Pahrump, Nye County, Nevada RFP Dear Dr. McFarlane: As requested, we have prepared a Self-Contained Report of the Former Mount Charleston Elementary School located at 1521 East Idaho Street. The subject is located along the south side of East Idaho Street, between Pahrump Valley Boulevard and South Dandelion Street, Pahrump, Nevada. The subject can further be identified as being Nye County Assessor's Parcel Number The property is zoned CF (Community Facilities), under the jurisdiction of Nye County. Furthermore, the property has a planned land use of "Community Facilities", according to the Pahrump Regional Planning District's "Master Plan Update", dated November 19,2003. The former Mount Charleston Elementary School's existing improvements consist of 22 buildings totaling 43,392 square feet on acres. The school contains 18 classroom buildings, a main office, an additional office, a library, and a multi-purpose building that serves as a cafeteria, gymnasium, or assembly hall. The former elementary school is currently vacant. The students at Mount Charleston Elementary School and Manse Elementary School relocated and combined into a newer building at the northern end of the Pahrump valley. Andrew J. Johnson has made an inspection of the site and improvements for the purpose of arriving at a supportable opinion of the "as is" market value in fee simple interest. The client and intended user of this report is the client, Dr. Michael McFarlane of Great Basin College. The intended use of this report is to assist the client in determining an equitable basis for a possible exchange of the two properties we are appraising (the former Mount Charleston Elementary School and the High Tech Center on Calvada Boulevard). The supporting data, analyses, and conclusions used to form the opinions of the market value of the subject are contained in the accompanying report and addenda. This letter by itself should not be construed as a complete report. This is a Self-Contained Appraisal Report which is intended to comply with reporting requirements set forth under Standards Rule 2-2(a) of the edition of the Uniform Standards of Professional Appraisal Practice (USPAP), for a Self-Contained Report S. DURANGO DRIVE, SUITE 100, LAS VEGAS, NEVADA PHONE (702) FAX (702) (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 4 of 9

5 Dr. Michael f. McFarlane, Ph.D. Page 2 File # Based upon an analysis of the market data and subject to the assumptions and limiting conditions contained within this report we have formed an opinion of the 11 as is" market value of the subject property in fee simple interest as follows: MARKET VALUE OPINION 11 As Is" Market Value OWNERSHIP INTEREST Fee Simple DATE OF VALUE November 21,2011 MARKET VALUE $1,900,000 The aforementioned market value opinions are contingent upon the general assumptions and limiting conditions contained on pages 1, 2 and 3 of this appraisal. The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions and hypothetical conditions. The opinions of market value have been predicated upon an exposure time of 18 to 24 months, based upon available market data. The marketing period has also been estimated at 18 to 24 months based upon similar data contained in the appraisal. Thank you for giving us the opportunity of appraising this property for you. If we may be of further assistance, please do not hesitate to contact us. Sincerely, lb~ cfudo~1.) Matthew Lubawy, MAl Nevada License # A CG License expires: April30, 2013 Andrew J. Johnso, Nevada License # License expires: J 3034 S. DURANGO DRIVE, SUITE 100, LAS VEGAS, NEVADA PHONE (702) FAX (702) (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 5 of 9

6 A SELF CONTAINED APPRAISAL REPORT OF High Tech Center OWNED BY Nye County School District LOCATED AT 551 East Calvada Boulevard Pahrump, Nye County, Nevada FOR THE PURPOSE OF Forming an Opinion of the "As Is" Market Value of the Leasehold Interest DATE OF REPORT PREPARED FOR Mr. Michael J. McFarlane, Ph.D. Vice President for Academic Affairs Great Basin College 1500 College Parkway Elko, Nevada APPRAISAL COMPLETED BY LUJB\AWY & A OC][ATE, ][NC South Durango Drive, Suite 100 Las Vegas, Nevada Phone: (702) Fax: (702) File # (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 6 of 9

7 JUUUB\A \\VY & A OCJ[A TJE t J[NC. REAL E TATE AlPJPRAJ[ ER AND CON ULTANT Mr. Michael J. McFarlane, Ph.D. Vice President for Academic Affairs Great Basin College 1500 College Parkway Elko, Nevada File # Re: A Self-Contained Appraisal Report of The College of Southern Nevada's High Tech Center 501 East Calvada Boulevard, Pahrump, Nye County, Nevada Dear Dr. McFarlane: As requested, we have prepared a Self-Contained Report of the Leasehold Interest in the High Tech Center located on the Pahrump High School campus and having a local street address of 551 East Calvada Boulevard. The subject is located along the south side of East Calvada Boulevard, west of Mount Charleston Drive, Pahrump, Nevada. The subject is a portion of Nye County Assessor's Parcel Number The property is zoned CF (Community Facilities), under the jurisdiction of Nye County. Furthermore, the property has a planned land use of "Community Facilities", according to the Pahrump Regional Planning District's "Master Plan Update", dated November 19, The existing improvements consist of one building totaling 33,464 square feet on 1 acre. The 1-acre site and building are ground leased to the "Board of Regents of the University and Community College System of Nevada" on a 48-year lease agreement that began on February 25, 1999 and ends June 30, At the end of the term, both parties can renew the lease, in writing, for 50 years. At the termination of the lease, the site and the building become the property of the Nye County School District. We have appraised the Leasehold Interest in the subject property. Andrew J. Johnson has made a personal inspection of the site and improvements for the purpose of arriving at a supportable opinion of the "as is" market value of the leasehold interest. The client and intended user of this report is Dr. Michael McFarlane of Great Basin College. The intended use of this report is to assist the client in determining an equitable basis for a possible exchange of the two properties we are appraising (the former Mount Charleston Elementary School and the High Tech Center on Calvada Boulevard). The supporting data, analyses, and conclusions used to form the opinions of the market value of the subject are contained in the accompanying report and addenda. This letter by itself should not be construed as a complete report. This is a Self-Contained Appraisal Report which is intended to comply with reporting requirements set forth under Standards Rule 2-2(a) of the edition of the Uniform Standards of Professional Appraisal Practice (USPAP), for a Self-Contained Report S. DURANGO DRIVE, SUITE 100, LAS VEGAS, NEVADA PHONE (702) FAX (702) (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 7 of 9

8 Dr. Michael f. McFarlane, Ph.D. Page 2 File # Based upon an analysis of the market data and subject to the assumptions and limiting conditions contained within this report, we have formed an opinion of the "as is" market value of the subject property in fee simple interest as follows: MARKET VALUE OPINION "As Is" Market Value OWNERSHIP INTEREST Leasehold DATE OF VALUE November 21,2011 MARKET VALUE $1,190,000 The aforementioned market value opinions are contingent upon the general assumptions and limiting conditions contained on pages 1, 2 and 3 of this appraisal. The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are not contingent upon any extraordinary assumptions and hypothetical conditions. The opinions of market value have been predicated upon an exposure time of 18 to 24 months, based upon available market data. The marketing period has also been estimated at 18 to 24 months based upon similar data contained in the appraisal. Thank you for giving us the opportunity of appraising this property for you. If we may be of further assistance, please do not hesitate to contact us. Sincerely, 4h~cf~1 Matthew Lubawy, MAl Nevada License # A CG License expires: April30, 2013 Andrew J. Johnson Nevada License #A. 076 CG License expires: Jan a 31', 2012 (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 8 of 9

9 (INVESTMENT AND FACILITIES COMMITTEE 03/01/12) Ref. IF-7, Page 9 of 9