The Camas School District agreed this week to temporarily reduce rent for Kagwerks, a private business leasing space inside the former Underwriters Laboratories (UL) building now owned by the school district.
The agreement will reduce Kagwerks’ rent by 50 percent through December and waive late fees, for a total savings of $21,250 in rent and $2,125 in fees.
“Although we do forgo rental revenue for a temporary period of time, we do secure a tenant at our campus for another year,” Jasen McEathron, the school district’s director of business services, told school board members on Monday, Sept. 28. “Kagwerks also would like to exercise their option of extending their lease for one year with an option to negotiate longer terms.”
Kagwerks, which offers firearms training, designs and manufactures military-grade tactical gear and, according to the business’ website, provides “durable solutions that increase performance and enhance efficiency and lethality on the battlefield,” has agreed to offer the school district a student internship opportunity.
The company requested a reduction in rent due to impacts from the COVID-19 pandemic, McEathron told board members Monday night, adding that the rent reduction was made in accordance with Governor Jay Inslee’s proclamation protecting tenants from adverse action during the pandemic.
“They’re impacted by COVID, too,” McEathron said of Kagwerks. “We’ve moved to give them some temporary relief but also keep them on as a tenant.”
On its website, Kagwerks recently noted that the company had experienced “a significant increase in demand and moderate delays in production due to COVID-19.”
According to federal documents, the company was approved on April 27 for a federal loan between $150,000 and $350,000 through the Small Business Administration’s Paycheck Protection Program, meant to help small businesses retain employees during the pandemic. The federal loans will be fully forgiven if businesses can prove they used at least 60 percent of the funds for payroll and the remainder for payroll, rent, mortgages and/or utilities.
Kagwerks was one of two businesses leasing space at the 115,000-square-foot UL building. The Camas-headquartered Fisher Investments also leased space from the school district, but recently moved into its newly completed offices in northwest Camas.
“With the departure of Fisher Investments, the terms for charging utility costs to the remaining tenant becomes inequitable,” McEathron wrote in a letter to the school board about the rental reduction and proposed change to Kagwerks’ utility agreement.
The initial lease agreement called for the school district to pay 5 percent of the utility costs and for Kagwerks and Fisher Investments to split the remaining 95 percent of the utilities and each pay a base fee of $17 per square foot.
“Charging Kagwerks 95 percent of (the) utility bills for their lease of 7,500 (square feet) is not reasonable,” McEathron said.
Instead, the district has agreed to modify the base rate and charge the business $23 per square foot to help cover their share of the utility costs.
Kagwerks owner Garrett Schwindell did not respond to the Post-Record’s requests for comment.
To learn more about the company, visit kagwerks.com or trainkagwerks.com.
Leasing space ‘new arena’ for district
The school district purchased the 115,000-square-foot UL building and 58-acre campus — located adjacent to the district’s Skyridge Middle School at 2600 N.W. Lake Road, for $11.5 million in June 2019. Two months later, Camas School District Superintendent Jeff Snell said the district was looking into leasing the building to private tenants until it could find a proper education-related use for the campus.
“This is a new arena for us. We haven’t done this before,” Snell told board members in August 2019, regarding leasing space to private companies.
Snell said then that the district would enter into short-term arrangements with companies.
School board member Tracey Malone said in August 2019 that, unless a company directly aligned with the school district’s education mission, she would be nervous about leasing the property for more than three years at a time.”
Snell added that the district was not trying to make money off the leases but wanted to “be really thoughtful and transparent about (its) needs (for the UL campus) and show people how they could partner with (the district) if they wanted to.”
UL, an Illinois-based company with labs and offices worldwide, moved to the Camas location in 1994. In September 2018, the company announced it was moving to another location in east Vancouver and would sell the Camas property in the first quarter of 2019.
The UL purchase was not the first time the Camas School District has taken advantage of a technology-related business moving out of Camas. In 2016, the district purchased the former Sharp Laboratories of America building and surrounding property for $12.5 million.
That property, which came with a 55,000-square-foot building and 30 acres of land, is now home to Odyssey Middle School and Discovery High School.