Leaked documents show that when the province’s freshly-appointed education minister was a trustee with the city’s public school board six years ago he pushed for approval of a new headquarters despite the fact district administrators had no clear plan of how to pay for the escalating cost of what had become a $285-million deal.

Gordon Dirks made the motion to approve the 20-year lease at a 2008 meeting of the Calgary Board of Education even though an internal report obtained by the Herald shows the construction price and rental payments for the Beltline tower had jumped by nearly half in the previous 10 months.

The documents show trustees were told the “potential” sources of the money needed to make the payments — now more than $12.5 million annually — included redirecting revenues then being used to maintain and operate schools and tapping possible proceeds from future sales of surplus properties in Calgary’s volatile real estate market.

Despite the financial uncertainties that now surrounded a building that had been quietly approved in principle four years earlier, Dirks and his then colleagues — including current incumbents Lynn Ferguson and Pamela King — unanimously approved the lease.

Since staff moved into the 200,000-square-foot tower three years ago and the CBE started paying rent that keeps rising by two per cent annually, the board has also had to struggle with provincial funding that has failed to keep pace with either enrolment growth or inflation.

Students now face larger class sizes and parents must pay higher fees as the CBE tries to balance an operating budget in which the line item for its new head office represents over one per cent of total expenditures.

The 2008 report shows the go-ahead from Dirks and his fellow board members came at the urging of board bureaucrats and amid growing impatience by the private sector firms that had been chosen as much as three years earlier to help build the new headquarters.

“CBE partners in the project (manager Bentall Real Estate Services LP and construction firm Ellis Don) are feeling frustrated about the lengthy planning time that has been required,” the secret document said.

“A sense of urgency is being experienced ... as it has taken several years to proceed.”

While the report said the $43.50 cost per square foot for space was in the range of market rates, a study done around the same time by commercial realtor Avison Young pegged the asking price for new construction on Beltline properties at $34 per square foot, nearly 22 per cent less than what the CBE agreed to pay.

Jack Bannon of Citicore Associates has said there were also ample signs of an impending oversupply that would cause rental rates to drop when the CBE gave the project the go ahead in early 2008 because dozens of buildings and millions of square feet were in the construction pipeline.

“This board lease is one of the worst real estate deals in Calgary’s history,” Bannon said in a subsequent report.

Neither Ferguson nor King were available for comment.

While Dirks has talked with other media outlets since his appointment Monday, his press secretary indicated the minister was too busy meeting stakeholders to speak with a Herald reporter for this story.