A powerful landholding organization in the Hasidic community of Kiryas Joel has taken over construction of a new public school for disabled Kiryas Joel children and could collect millions of dollars in rent from taxpayers for years to come.

Administrators concede that leasing the building for 30 years could cost about $5 million more than if the district itself built the school and borrowed money through bonds to pay for the work.

But Superintendent Steven Benardo argues the new arrangement is better because it would save money for the first 11 years. The savings would end then because the rent is expected to surpass what the annual bond payments would have been.

The lease is subject to a referendum tomorrow. Voters will be asked whether the district should lease the building for up to 30 years and pay rent starting at $792,000 and rising each year with the rate of inflation.

The prospective landlord is Vaad Hakiryah, a private organization primarily known outside the Hasidic community as the buyer of ACE Farm, a 140-acre expanse beside Kiryas Joel. Vaad Hakiryah is already paying for the construction, according to Benardo.

Over 30 years, assuming 3 percent annual inflation, the rent bill would total $37.7 million.

By comparison, administrators calculate the district would pay $32.8 million over the same period if it built the school on its own, based on a $15.2 million project cost and a 6 percent bond interest rate.

Leasing would not be new for the tiny district. It now pays rent to a local charity called The David Ekstein Foundation to occupy its building on Kahan Drive, Benardo said.

The cost estimate for the new building has risen steeply. In June 2005, the school board approved borrowing just under $10 million to buy land and build the school.

But three months ago, Benardo estimated the price might be as high as $13 million. Then construction bids were opened, and the sole bid for heating and air conditioning work was higher than expected, he said.

The latest construction estimate � $15.2 million � doesn’t include the cost of the property, which Vaad Hakiryah owns. Benardo said the land costs “well over $1 million.”

In addition to the short-term savings, Benardo said the advantage of turning over construction to a private party is that it can bypass the time-consuming bidding process that school districts follow. He is eager to finish before the fall of 2007.

“We are in a very difficult situation here with a way to have my kids in by ’07,” Benardo said. “We were running into all kinds of things.”

Leasing allows more flexibility than bonding, he argues. The referendum authorizes a lease of up to 30 years, but it might be shorter. And whatever the length, the district can always renegotiate later, Benardo said.

Because of a funding formula factoring in the high number of parochial students in the community, Kiryas Joel would have gotten minimal state aid for the project if it had built the school itself, Benardo said.

If it leases, the district will likely get a comparable amount of state aid to subsidize the rent, he said.

Workers have nearly finished the foundation for the 40,000-square-foot school, which is being built on 2.2 acres beside Bakertown Road.

Benardo said that if the referendum fails, the district will issue bonds and build the school itself. But he’s confident of the outcome. In the 17 years that the district has existed, he pointed out, no budget has ever been defeated.

Voting will take place from noon to 8 p.m. tomorrow at the Ezras Choilim Health Center, 49 Forest Road.

ROL