The city's 60 charter schools, spread over 92 campuses, receive a per-pupil allotment and an annual facilities allowance from the District, which will total about $360 million this year for an enrollment of about 26,000. The private nonprofit groups that run the schools use those funds for operating costs and often turn to bank loans, along with grants, fundraising and investor tax credits, to finance the construction or renovation of buildings.
Local school officials said they have not heard of a project that has been scuttled. But even charter schools with track records as effective alternatives to traditional public schools find economic conditions more challenging. KIPP DC, which operates four schools in low-income neighborhoods, is trying to line up financing for a $23 million renovation of the former Douglass Transition Academy, a closed public school in Ward 8. It has leased the building as a home for a new high school and early childhood center it wants to open next fall.
Allison Fansler, KIPP DC's president and chief operating officer, said this week that financing for the renovation of leased properties is difficult in the best of circumstances because of the lack of collateral for a bank to fall back on if a loan goes bad. But Fansler said the charter community's traditional banking partners, such as Bank of America, PNC and M&T Bank, have been tentative.
"We're reaching out to build as many relationships as we can," said Fansler, who remained optimistic that a deal can be struck. "There are a lot of ways we can mitigate this, but it's just more complicated and expensive."
Other ventures have been delayed by the economic uncertainty. César Chávez Public Charter Schools for Public Policy had hoped to have a third campus, at the old Bruce School building in Petworth, up and running this fall. Bryan Patten, chief financial officer, said the original plan involved generating money for the renovation through the sale of tax-exempt bonds. In mid-2007, he said, "it was an attractive option, but every time we talked to the bank, the interest rate went up." Eventually, the school secured a conventional construction loan, but it will not be able to occupy Bruce until next fall.
Sunday, October 12, 2008
Recent economic downturn to hit charter growth
Successfully starting and running a charter school is difficult during the best of times. With the current financial system melt down things have just gotten a lot harder.