Facilities Research Review Finds Gaps and Unfunded Programs

NCSRC recently published A Synthesis of Research on Charter School Facilities, a new, in-depth report on charter school facilities that examines the current state of charter school access to facilities, including facility acquisition and ownership, and facility funding and financing.

The report identifies four key findings relevant to the current state of charter school facilities: 

  1. The average U.S. public school building is aged and in need of maintenance, and low-income and students of color are disproportionately likely to attend schools in underfunded and poor-quality facilities.&nbsp
  2. Access to facilities may be influencing the charter school pipeline and the amount of public funds spent on charter facilities. 
  3. Many State funding and financing programs designed to offset the cost of charter school facilities are not currently funded. 
  4. Programs providing credit enhancement to charter schools offer low-cost and highly effective means for expanding affordable financing options for charter schools.

Learn more and read the report.

New Market Tax Credits Announced

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NMTC

The CDFI Fund just announced the next round of New Market Tax Credits awards with $3.5 billion in funding. Public schools, both district and charter, are an eligible use of NMTCs and have been the beneficiaries of hundreds of millions of tax credits. While half of NMTC investments go to business expansions and commercial real estate, the balance goes to a wide range of community facilities, including private, district and charter schools. About 4% of all NMTCs are used for schools. NMTCs help schools and other community facility projects achieve significant savings on the cost of financing new or renovated facilities.  Through the NMTC program, charter schools can access patient capital in the form of a seven-year loan with interest rates, terms, and conditions much more favorable than what they might secure through a conventional loan. By the end of the investment, a school can realize about a 20% savings on the total project cost.

Visit our page on NMTCs to learn more. 

National Alliance Announces Facility Policy Series — States’ Role in Supporting All Public School Children

The Charter School Facility Center is kicking off a new Facility Policy Series to review the states’ role in supporting all public school children, exploring the role and responsibilities of state governments to provide adequate and equitable facilities for all public school students.  Over the next year, the Facility Center will lead an ambitious effort to research how states can become more engaged in supporting all public school students through access to facilities, funding facilities, financing facilities, and encouraging private solutions.  

The premise of this project is to suggest and then prove that, if organized and defined properly, states can provide equitable support for school facilities for all public school children, including those in traditional school districts and public charter schools.  

The policy series will be organized around four themes.  

  1. The first theme will be a review of all the best practices available to support public charter school facilities. The Facility Center is pleased to begin this conversation with a list of 25 promising practices for facility solutions in a brief titled Overview of State Facility Policies and Other Facility Strategies. Over the next year, the Facility Center will collect more promising practices from the field.  
  2. The second theme builds upon the work of the National Alliance in describing the public policies and state laws supporting facilities. These include the National Alliance’s Model Law, the National Alliance’s Scorecard for State Laws, and a series of Snapshots of State Facility Laws. The first snapshot is School District Facilities and Public Charter Schools which looks at the state laws that are designed to assist public charter schools in leasing or acquiring public buildings including school district buildings. The second snapshot is Facilities Funding for Public Charter Schools, which looks at the state laws that provide sources of funding for public charter school facilities. Additional snapshots will be forthcoming.  
  3. The third theme recognizes that having a law is only the first step. Many states have laws on the books but they are not being enforced, or are not being funded, or are not having the intended consequences due to loopholes. The Facility Center will investigate the effectiveness of these policies in practice. The result of this analyses will be a ranking of the states and school districts that are providing adequate and equitable facilities. This ranking can be used by charter schools to determine the most attractive places for securing facilities, as charter schools look to identify new locations for expansion.  
  4. The fourth theme will be to offer state-specific and site-specific suggestions and recommendations to improve facility policies and practices.  

This work is made possible thanks to a generous grant from Department of Education. The National Alliance for Public Charter Schools has received funding from the U.S. Department of Education to disseminate best practices concerning charter school facilities through the Charter School Facility Center.   

A Wrench in the Works — How Schools Can Keep the Coronavirus Pandemic From Derailing Their Construction Projects

Many state governments have deemed school construction an essential service during the coronavirus crisis. This is a good thing. While New York, the nation’s pandemic epicenter, didn’t give school facilities projects the green light until April 9, states less hard-hit were quicker to make the declaration. That sounds like good news for charter schools expecting to move into new or renovated buildings in time for the fall.

Not necessarily.

Mass public quarantines implemented by China to slow the coronavirus there temporarily shut down factories in the world’s second-largest economy. This will disrupt supply chains globally for months at least, and that includes building supplies.

What does this chaos mean for school leaders, building owners and contractors — not to mention teachers, students and parents — wondering about the fate of charter school construction projects? 

Check out our article in the74 for more info.

Federal State Entity Grant and Facilities

Are you applying for the State Entity Grant? Luckily, the deadline has been extended until May 15. That gives you time to make sure your application has all the essential strategies.

One of the most complex problems new charter schools face when opening a school is securing the facility. The SE grant is not eligible to fund the development of facilities and many states have ignored any and all facility related solutions. However, the SE grant can be used for technical assistance in any aspect of opening a new school, and that includes helping schools make the best decisions when securing a facility.

Three states have successfully developed facility related technical assistance programs as part of their SE applications.

Idaho. The application by Bluum, a charter support organization, allowed SE funds to be used for “providing high-quality technical assistance to aspiring applicants” and their support will focused on “providing facilities development and financing” in addition to other support. Upon receipt of the award, Bluum solicited a contract to develop a Refinancing Guide and provide direct technical assistance to individual schools seeking to refinance their debt to allow them to grow and add more schools or campuses. One of their consultants has been working with six schools and has helped them identify new, lower-cost, facility funding sources that should save the school over $1 million dollars. Those savings can then be used to help the charter school expand and add a new campus.

Alabama. The application by New Schools For Alabama, a charter support organization, allowed SE funds to be used to “offer support services and tools for facilities, financial planning…”. Upon receipt of the award, New Schools For Alabama contracted with a local commercial realty firm to update their Charter Facility Index, a database of available properties for new and aspiring charter schools. This helps schools identify available properties without having to pay broker fees for properties that are already publicly known by other charter schools. They also hired a consultant with facility experience to help with their charter start-up services. He has already helped a new school secure New Market Tax Credits which can save around 30% of the cost of a facility.

Florida. The application by the Florida Department of Education allowed SE funds to be used to “provide short-term, intensive, and targeted support to new charter schools." which include efforts to support facility needs. Upon receipt of the award, the Department contracted with a local nonprofit charter school loan fund to manage the Charter Support Unit. This group provided one-on-one phone support and developed a suite of webinars, tools, and templates for a range of operational issues as well as facility related activities. The group helped over 20 schools identify 100% financing and eliminated the need for the school to provide equity in their transaction. This Charter Support Unit also has been instrumental in helping new charter schools open in a location and reducing the number of schools closing during the first years of operation. 

If you are applying for an SE grant, be aware that you can use the funds to support technical assistance to help schools solve one of their most persistent problems: facilities. If you need help identifying organizations or people to help you with facilities support, the Charter School Facility Center can provide a list of resources. Please contact Mark Medema for more information.

 

IDAHO APPLICATION

Activity (b)1.3: Provide high-quality technical assistance to aspiring applicants: Bluum, in partnership with the PCSC, state agencies, and district partners such as the Nampa Public School District, has worked to assist 10 schools in Idaho to open and/or expand since 2013. There are several others now in the pipeline. Much expertise has been developed around providing pre-opening training and technical assistance to new schools and expanding schools alike. For example, in April 2018, Bluum coordinated a workshop for new schools (to be opened by Idaho New School Fellows and their boards in August 2018 or August 2019) entitled Responsibilities & Obligations of Charter School Boards (see appendix F). This training was led by Bluum staff, PCSC staff, and a longtime charter school attorney.

Supports provided will be focused on what we already do well – capacity building, new school incubation, talent recruitment, facilities development and financing, coordinating student transportation, financial management and back-office operations, governance recruitment and training, evidence-based instructional practices as defined by ESSA, special education, student retention strategies, English Language Learners, pre-opening activities, and, if needed, school closure guidance and support. 

ALABAMA APPLICATION

NSFA will also conduct site visits, promote positive messaging and public relations about Alabama’s charter school sector, and offer support services and tools for facilities, financial planning, philanthropic funding, and the application/regulatory process.

NSFA will provide technical assistance to all subgrantees before, during, and after the application process to ensure success during the critical startup years. From NSFA, prospective subgrantees will receive technical assistance in the areas of 501c3 application support, charter application review and feedback, mock interviews, community engagement support, assistance with facilities acquisition and finance, and strategic consulting.

Two of their stated milestones in their implementation plan include:

  • Maintain Charter Facilities Index
  • Continue facilities assistance described herein

FLORIDA APPLICATION (paraphrased)

The Department proposed, in its application to the US Department of Education, the creation of a Charter Support Unit (CSU) to provide short-term, intensive, and targeted support to new charter schools. The CSU team, having expertise in curriculum, instruction, finance, facilities, governance, and leadership will be available on short notice to conduct online or on-site assessments and provide recommendations and support to new charter schools.

Trust our communities with their schools

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Charter School Facility Center Advisory Board

The last 25 years have changed the way we think about our public schools. Families were once told where to send their children. Today, we see a variety of options for families – they have their traditional district community schools for whom the vast majority of families attend. Nowadays, we also have community-wide, open-enrollment schools, specialized schools (such as magnet schools, STEM schools and schools for the arts), schools within schools, and open-enrollment, charter schools. This variety has changed the landscape of what communities need in school buildings and their locations throughout our neighborhoods. For cities and towns with growing populations, there is simply the need for more school buildings . For cities and towns with declining student enrollment, there is the need to more effectively manage school buildings.

The education community can learn from other social sectors about how to plan, identify, finance, and preserve options for these buildings. The concept of land trusts and real estate trusts has been used by cities for centuries for health care, affordable housing, open space, and higher education. Pathway 2 Tomorrow recently published the Center on  Reinventing Public Education’s (CRPE) report, A More Enterprising Approach: How Public Trusts Can Help Address School Facility Challenges, that highlights ways cities can manage school properties through a citywide real estate trust. These trusts can be independent agencies or non-profits that manage a city’s educational facilities tasked with the responsibility of ensuring that community schools can afford to stay in the communities they serve; that these schools can focus on serving the young people in communities.

The paper builds upon two other reports from earlier this year which show how school buildings can be built, financed, and managed so that both schools and communities thrive. The research team at Public Impact, in their paper, Charter School Facility IncubatorsAn Innovative Approach to Charter School Facilities, looked at one non-profit in Washington, DC that acts as an incubator to help start new schools that would not be able to secure their own building. This entrepreneurial model is borrowed from the technology sector where so many tech start-ups begin instead of the garages of the 80’s or working out of a successful tech company that itself was a start-up a few years earlier. Several schools have successfully started and are serving young people in their community through this innovative program.

The National Alliance for Public Charter Schools, in their paper, Community Land Trusts and Charter Schools, looked at how Community Land Trusts can support individual schools like how they have ensured affordable housing for decades. These entities are managed by the community and the community can decide who should use the property—whether that is housing, health and wellness, education, or other critical hallmark of communities. This is a throwback to the way education decisions were made in the beginning of our country.

This spectrum of trusts shows that the new paradigm of public school choices, which has a variety of school building models, can be managed very differently than the old school district model of yesterday. Empowering communities with the decisions can provide more transparency and accountability to the way school buildings are managed and built, and ultimately how to use limited space within growing cities for the needs of the community.

Too many old empty buildings sit empty, mired in politics. Too many community-focused organizations spend their limited dollars on buildings and real estate, instead of being able to focus on the community.

It’s time to let the community members be involved in the decisions about their community needs, from housing, to health, to education. Let’s trust them with school building trusts.

 

Facility Funding: States Turn to Moral Obligation Bonds For Charter Schools

Since the early 1970s, moral obligation bonds have been used to finance housing, higher education facilities, hospitals, corrections facilities, and more. 

As more charter schools access the bond market to finance their facilities, the interest they pay is funded by a school’s operating costs (which are provided through taxpayer dollars), meaning every increase in interest represents fewer dollars available for textbooks, teacher salaries, and field trips. As states seek to use their education budgets more efficiently, moral obligation bonds are an attractive option to lower interest rates without overburdening the state’s balance sheet.

Want to learn more?  Click here for a collection of resources on moral obligation bonds. 

Even Celebrities have Facility Woes!

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Common

"The facilities challenges for charter schools are so real that even well-connected celebrities can’t avoid the struggle" says Kim McCabe about rapper Common's challenges with trying to find a suitable building to house his new school.  Check out the full write up below. 

‘Tis the season for "FRED" Clause-a career that makes a difference!

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School Christmas Ornament

Do you remember the 2007 Vince Vaughn movie about Santa’s brother who was never able to measure up to his saintly sibling’s career? Do you know someone who feels like they need to find meaning in their work, and not just to measure up to their sibling? We’re entering the season when people are waiting for their bonuses and then they promise that they’ll look for a new job – one that focuses on helping others – and not just helping others make more money.

There are numerous ways to find more meaning in the work you do AND get involved in social enterprises that can take advantage of your financial or real estate skills. You can succeed in real estate finance AND make a difference in the world. It’s no longer an ‘OR’ decision. You may not make a million dollars a year, but you don’t have to eat ramen noodles every day (unless you like to).

One of those people keynoted the NI19 conference. Anand Kesavan discussed his career path with the Walton Family Foundation’ Romy Drucker at the Friday keynote. He described how he was once an investment banker but wanted to spend his time working on improving education. He changed careers and worked as a CFO for a charter school, and then as a venture philanthropist, and finally started the Equitable Facility Fund. He explained how he created a new $600 million fund modeled after state financing programs. He has developed a world-class loan fund, raised capital from the tax-exempt bond market, and is designing an impact investing fund. This social impact fund is likely one of the top 5 true impact investing funds.

Anand is not the only one to have found a career in the education sector. There are many others who work in finance to fund charter schools with affordable debt and equity. There are others who are socially motivated real estate developers building schools in communities that have been overlooked by traditional investors. There are others who are policy advocates leveraging state and federal programs to serve all children. These people find their mission in their work to expand quality educational options for students who are often left behind. Through their efforts, more students have the chance for a quality education and can break the cycle of poverty.

If you are interested in following these paths, there are plenty of options. You could join a school district’s real estate team. Or you could join a charter school’s team, one that is likely smaller, more creative, and focused predominantly on lower income children. These groups are looking for people who may never have thought about using their Financing, Real Estate, and Development (FRED) skills.

There are also ways to design your own career path. Many jobs are not found by replying to a job description – they are created with you in mind. For example, we are pleased to announce the Charter Facility Fellowship, a new rotating management program with select finance and real estate organizations. We can work with you to tailor the rotation program to fit your career plans. We can also help create a position or an internship at a leading charter finance organization. It’s all free.

Take charge of your career and let’s design the right path for you. If you want to know more, contact us or look at some of the sample job descriptions listed here at the Charter School Facility Center.

Then you can show up your brother who’s always bragging about how many toys he can deliver in one night.