On July 1, members of the Our Lady of Mercy Preparatory Academy (OLMPA) community and First Selectman Tom Banisch gathered at Island Avenue Elementary School for a photo, celebrating the finalized lease agreement and the future use of Island Avenue as the new home for OLMPA and private pre-K-8 Catholic based-education in town.

In mid-June, Banisch and representatives of OLMPA sat down to finally sign the previously agreed upon and approved lease document. At the signing, Banisch called the lease “a win-win for the town and the schools”.

In October 2018, residents overwhelmingly approved the lease between the town and OLMPA for Island Avenue School. The terms stipulate that the lease will be for one year beginning in August 2019 (after Madison Public Schools has vacated the building) with no option for a renewal period or extension. The total rent payment is $535,000, payable five days before the building is delivered to OLMPA. OLMPA would be responsible for all maintenance and associated costs in what is known as a triple net lease. The lease document also goes into specific details of the building as well as insurance coverage and indemnification.

One change of note between the 2018 version of the document and the current signed agreement is the payment. The total cost is still the same, but no longer has to be paid completely up front: The base rent for the term is $535,000 payable in three payments: $150,000 within 10 business days of signing the lease agreement; $250,000 on or before the delivery date (delivery date to be no later than Aug. 1, 2019); and $135,000 on or before Jan. 6, 2020.

To calculate the lease cost, the town took into account what the net present value of the property would have been if it had been immediately sold, as well as other hard costs like busing and nursing, which the state requires municipalities provide to private schools within the borders of that municipality.

The revenue to the town, net of the cost of a bus and a nurse, would be a little more than $400,000. However, that revenue was not counted in this fiscal year budget and will go into the general fund.