With a full enrollment of 185 students in grades K-6 and a top-tier "performance" rating from the state, business at Pueblo School for Arts and Sciences-Fulton Heights campus is booming.

So much so that the PSAS board has been in negotiations to purchase the building from Pueblo City Schools (D60), PSAS' chartering authority, in hopes of expanding.

And while district officials have indicated a willingness to sell the property, PSAS representatives maintain that D60 is, for reasons unknown, dragging its feet, necessitating the exploration of other expansion options.

Currently, PSAS-Fulton Heights is occupying the campus on a five-year lease, with no rent paid to the district. A year ago, PSAS representatives appeared before the D60 board seeking a 30-year lease, which they termed essential to securing long-term funding to construct a new building on the property. When that proposal fell by the wayside, the PSAS representatives offered to buy the building outright for $325,000.

"As part of our Fulton Heights agreement with District 60 and the Colorado Department of Education, we will serve students through the eighth grade," said James Olonia, president of the PSAS board.  "Our plan, which we shared with the district from the outset, was to build onto the existing Fulton Heights facility in order to serve those students as we grew into middle school.

"We offered to purchase the property from the district, at its full asking price and with no negotiation whatsoever, when it became clear that in order to finance construction we would have to show prospective lenders that the facility would be safe collateral for their investment. We planned to build a gym, cafeteria and additional class and office spaces at Fulton Heights to support our growth."

From the standpoint of the PSAS board, one of the major points of contention is contract language centered around reversion of the property.

"Over several months, our negotiations with the district progressed," Olonia said. "However, they asked us to agree to contract provisions, which would ensure that the facility could never be used by a school not authorized by District 60.  Initially, these provisions involved 'reverter clauses,' which would have precluded us from borrowing construction funds, since the clauses would be invoked at any time PSAS was not financially viable.

"In other words, our lenders would not have been able to take over their collateral if we were not successful. That clause effectively precluded us from borrowing to build. Finally, our lawyers were able to get these clauses partially changed, but it took a great deal of time and our window of opportunity to build the new facilities for next year was closed."

In a statement, the district said that not only does it remain willing to sell the Fulton Heights campus, it discounted the price by $43,000 in light of improvements made by PSAS. District officials confirmed changes to the reverter provision, "presenting a contract with a right of first refusal for the district to repurchase and a restriction that would not allow PSAS to sell the property to another person or entity for use as a school that was not authorized by D60.

"This was apparently acceptable to the proposed lender but not to PSAS. This is the same kind of limitation that was placed on the sale of both Spann and Somerlid."

Olonia, however, said the changes do not offer enough protection to PSAS.

"It states that if PSAS is ever no longer a District 60 charter school — for example, if we became a Charter School Institute school —  the district would get the property back," Olonia said. "Also, if District 60 somehow lost its ability to charter us at any point, we would lose the building."

With the sale of the Fulton Heights campus in limbo, the PSAS board has turned its attention to the former Colorado Department of Transportation headquarters on North Erie Avenue, applying for a charter expansion in hopes of establishing a grades 4-12 school to serve the 175 students currently on a waiting list.

Olonia expects the D60 board to address that expansion request early in the new year.

jpompia@chieftain.com