The Walton Family Foundation announced this week the creation of two new funds that could play a major role in aiding charter schools across this country obtain permanent facilities. Of course, securing permanent buildings is the greatest, and seemingly most intractable, problem facing these institutions.
The Charter Impact Fund, as described by the foundation’s press release and formed with an initial $200 million investment, is a non-profit that will “provide long-term, fixed-rate loans—similar to a home mortgage—to high-performing charter schools anywhere in the country for up to 100 percent of project costs. The CIF provides charter schools with access to lower transaction costs and quicker loan execution —allowing each school to save several million dollars over the loan term.”
A second financing mechanism, The Facilities Investment Fund, will offer five-year fixed-rate loans to charter schools in order to cover 90 percent of a renovation or new building. Backed with $100 million, it has been originated through a partnership with Bank of America Merrill Lynch and overseen by Civic Builders.
Both of these moves seem promising and it will be interesting to see if they provide value to charters here in D.C. But what if charters do not have the money or cash flow to support loans? In addition, support of renovation costs does not help if buildings cannot be found. The District has such a strong commercial real estate market that identifying potential facilities is a puzzle that often cannot be solved.
I have been thinking for sometime now that locally we should adopt the method that Denver uses for adding charters. In that city the school district builds facilities for them. But at the 2018 FOCUS Gala, Scott Pearson, the executive director of the DC Public Charter School Board, pointed out to me that the situation there is actually not working as planned. For example, he pointed out that the Denver School of Science and Technology, a school I have visited that has essentially been able to close the achievement gap between affluent and poor students, has several charters in the pipeline ready to open but Denver Public Schools has yet to construct their homes.
Perhaps there is no solution to the charter school facility issue.