Economy slows Kenosha school construction

Dustin Block
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The economy, not a faulty $37.5 million investment, will slow construction in the Kenosha Unified School District.

Patrick Finnemore, the district’s director of facilities, said Kenosha likely will not seek approval to build additional schools for at least four years. It’s a significant slowdown for a district that had been opening a new school about every 14 months.

“The economy has affected home sales in the county,” Finnemore said. “Enrollment growth hasn’t been the same as the past 17 or 18 years.”

Of course, that’s future construction. Contractors started work this week on a $50 million addition to the district’s Indian Trail Academy, Finnemore said. When complete, the 428,000-square-foot building will be Kenosha’s third full high school. The project’s first phase is scheduled to open in fall 2010 and the second phase in fall 2011. It will hold about 2,000 students.

Kenosha Unified opened one new elementary school this year, Finnemore said. The district likely will try to build two new elementary schools by 2014, he said.

The district’s pending lawsuit against financial advisor Stifel, Nicolaus & Co. Inc. and the Royal Bank of Canada is not expected to affect future construction, according to school officials. Kenosha Unified is suing the companies over an investment that lost about $36.6 million of the $37.5 million investment in less than three years. The district wanted the investment to help pay for teachers’ retirement and health care benefits.

The investment is called a collateralized debt obligation, which relies on the stability of major corporations, such as General Electric Co., but also on companies such as Lehman Brothers Holdings Inc., Fannie Mae and Freddie Mac. When the financial markets tanked, Kenosha Unified’s investment — and the investments of four other school districts — followed suit.

The districts that lost money, roughly $200 million in all, on the investment include Kenosha Unified, the Kimberly Area School District, the School District of Waukesha, the West Allis-West Milwaukee School District and the Whitefish Bay School District. All five districts are suing Stifel.

Despite the sizable loss, Kenosha Unified School Board member Marc Hujik said the faulty investment “had no effect at all,” on construction at Indian Trail.

District spokesman Craig Peterson, of the Milwaukee public relations firm Zigman-Joseph-Stephenson Inc., said the lost investment will not affect future buildings. District officials were not considering the pending lawsuit — win or lose — in the long-range construction program, he said.

Finnemore said it is an excellent time for the district to expand the high school. Bids for the project — approved by voters shortly before the recession became apparent — came in $2.5 million under budget.

Voters had approved $52.5 million for the high school.

“We got phenomenal bids,” Finnemore said.