Hinsdale D86 Lease Deal Questioned By Board Member

DARIEN, IL – The Hinsdale High School District 86 board last week approved an amended agreement with the landlord for its transition center.

But one member said the deal would not benefit the district.

Under the new agreement's terms, the $500,000 tenant improvement allowance now due to the district would be waived.

In return, the district would see its lease payments lowered by $3,333 a month, or $40,000 a year. The electric meter would be reassigned to the landlord.

During a discussion, board member Peggy James said she did not believe waiving the $500,000 payment would be beneficial. She said it was essentially giving the landlord an interest-free loan.

"We won't recognize any benefit until 2030," she said. "That's seven years from today. So imagine what we could do with that half million dollars between now and seven years."

Josh Stephenson, the district's chief financial officer, disagreed.

"I would like it to be clear that the characterization that it is an interest-free loan is not accurate," he said.

He said the district's rate of return is 6 percent on the transaction, which compares well to an "alternative set of investments." The landlord, he said, planned to install solar panels.

The board voted 5-1 for the changes to the agreement. James was the lone dissenter.

Member Jeff Waters abstained.

Asked by Patch why he did not vote, Waters declined to comment.

Members of public bodies abstain for a number of reasons, including possible conflicts of interest.

The transition center helps students with special needs from 18 to 22 years old. The center is at 16W361 S. Frontage Road in Burr Ridge.