Facilities Finance Spotlight: Ralph Bunche High School and Jefferson Middle School
November 28, 2011
Animo Jefferson Charter Middle School is Green Dot's first middle school, while Ralph Bunche has been a high school for five years. The two operate on the same campus, but were previously leasing from the nonprofit real estate developer Pacific Charter School Development (PCSD). The buildings were originally industrial facilities but PCSD acquired and transformed them into LEED-certified school sites. As is PCSD's model, the plan was to transfer ownership to Green Dot, but the challenge was how to obtain nearly $22 million in financing to acquire the facilities.
A coalition of partners, led by NCB Capital Impact and Low Income Investment Fund, found a way to get the deal done. Since the schools' site qualified as a highly distressed, low-income community, the deal was eligible for both JP Morgan Chase's Funding Initiative for high performing charters and ExED's New Markets Tax Credit allocation. CCSA initially pledged $500,000 of its allotted United States Department of Education (USDOE) Credit Enhancement Grant to help secure the deal.
However, the deal encountered hurdles. The Chase program requires sinking fund payments based on a 15-year amortization, but this schedule was not financially viable for Green Dot. The working group quickly mobilized to restructure the deal to a 25-year amortization schedule. CCSA provided an additional $1 million in enhancement from its USDOE Credit Enhancement Grant as necessary security. At the end of the day, the winners are the students of these two Green Dot schools.
"It's critical to support Green Dot Public Schools and their students. Without Green Dot schools, thousands of inner city youth in Los Angeles would not be graduating from high school or attending college. Having an adequate facility is an important piece of offering these students a quality education," said Jennifer Afdahl Rice, senior loan officer at NCB Capital Impact.
For more information on CCSA's Credit Enhancement from the USDOE, visit our California Charter Building Fund page. For general information on charter school facilities, visit CCSA's online Charter School Resource Library.**