Unintended Consequences of Leasing Westbrook

The West Islip School District paid $877K to install a fire sprinkler system over the course of 2016 and 2017 due to the nature of a tenant’s business as a day care provider and lease terms that hold the District responsible for fire safety. The South Shore Children’s Center of West Islip (SSCC) is one of three tenants that lease space at the Westbrook building and it was confirmed by the Superintendent in the August 12, 2021 Board of Education Meeting that the preschool triggered the fire sprinklers.

The fire sprinkler installation was completed in February 2017 and ultimately led to amendments to two tenants’ leases resulting in higher rent amounts. Effective in August 2018 SSCC began paying an additional $1,155.75 per month ($0.65 per square foot) through June 30, 2027 while effective in November 2018 Divine Rhythms (DR) began paying an additional $1,465.08 per month ($0.96 per square foot) through its lease expiration on June 30, 2027. SCCC’s amendment does not include a sprinkler related rent increase for the last year of its lease ending on June 30, 2028 and its financial obligation is $124K, or 14% of the installation, while DR’s obligation is $152K, or 17%, resulting in a net cost to the District of $601K or 69% of the initial cost. At the end of their respective leases, DR will be paying $12.19 psf in total rent and SSCC will be $12.30 psf. The third tenant is the West Islip Teachers’ Association that leases one classroom. While there is no stipulation for a rent increase related to sprinklers, the rent was at $17.39 psf per its one year lease that expired on May 31, 2022 which contained a renewal option with a 3% annual increase in rent.

The unbudgeted Capital Fund expenditure was funded by local tax revenues and thus didn’t require voter approval as is the case in most capital projects. This expenditure did not qualify for state aid reimbursement as the building was not used for educational purposes by the District’s students.

While the topic of fire sprinklers was included at several Building and Ground (B&G) Committee Meetings and Regular Board Meetings, meeting minutes include little or no specificity and never included any mention of the $877K cost. A timeline of the events include the following:

• The first mention of the code violation was in a B&G committee meeting on January 12, 2016 that discussed the building’s fire inspection.
• The B&G minutes for the February 9 and April 12, 2016 committee meetings use the term Westbrook occupancy.
• On April 14, 2016, the District successfully petitioned the New York Department of State for a variance pertaining to two sections of the Building Code in connection with the sprinkler installation. Mention of the upcoming hearing was included in the April 12 B&G Committee minutes.
• A Resolution was passed at the April 19, 2016 Planning Session that estimated the project at $1.2MM and authorized use of the Unassigned Fund Balance of the General Fund to fund the project.
• The capital project was not included in the District’s 2016/2017 Budget and thus not included in any presentation to the community during the March through May 2016 budget process.
• The four Board members who were present at a Special Meeting held on July 20, 2016 voted unanimously to approve a Bid for Installation of the fire sprinkler system. The amount of the bid was not included in the meeting minutes.
• The installation began in August 2016.
• The minutes for the B&G Committee update at the December 8, 2016 Regular BOE meeting includes the Westbrook sprinkler installation is almost complete.
• An email dated January 17, 2017 from the B&G Director to the Superintendent itemizes an estimated cost of the installation at $887,470. The actual cost was later reported by the Business Office as $877,748.
• The installation was completed in February 2017.
• The minutes for the B&G Committee update at the March 9, 2017 Regular BOE meeting is limited to a recent Westbrook fire inspection. This is likely referring to the post installation inspection.
• The District began receiving higher rent in August 2018 from SSCC and in November 2018 from DR. Through June 30, 2022 the District has received $54,320.25 from SSCC and $64,463.52 from DR in connection with fire sprinklers.
• When asked by a resident about the cost of the sprinkler project at the June 10, 2021 monthly Board meeting, the BOE President responded that the District had already recouped the $877K from its tenants. His response is included in the meeting’s video (1:23 mark) posted on the District’s website and there was no documentation provided by the District that supports his claim.

Note: The above was based on documents provided by the West Islip School District.