1. Charter Facilities and Financing
Justin Matthews, Executive Director
Mountain Island Charter School
Jennifer Lucas, Managing Director
Voyager Academy

2. Facilities as a Component of Budget
15%
10%
20+%

3. How Much Facility?
On average, plan for sqft per student Generally, the larger the school, the lower the per square foot ratio Highly dependent on scope of program, design of building 400 Membership School=around 30k sq ft 800 Membership School=around 50k sq ft

4. Policy ID Number: TCS-U-015
Virtual Facility
Policy ID Number:  TCS-U-015
The virtual charter school shall have an actual, physical location within the geographic boundaries of the state of North Carolina
 The virtual charter school’s student-to-teacher ratio cannot exceed 50 to 1 per class. 
the virtual charter school shall receive the same rate as a full-year course in the NC Virtual Public School for eight courses per student
This calculation excludes academic coaches, learning partners, parents, or other non-teachers of record
The school will receive an equal rate of state funds per pupil. The school will nOT receive local funds. The school may receive federal funding available per federal law, if the school completes the required federal documentation.

5. Facility Archetype #1 New Construction
$100+ per sqft ($8+ average per sqft, per year)
Most difficult to finance without 3+ Years of Operation
Longest lead time from Planning to Completion
Lowest long term cost
Highest probability of building meeting program needs

6. Build to Suit

7. Facility Archetype #2 Pre-Existing Construction/Renovation
$100+ per sqft cost (existing structure plus cost of renovation/retrofit)
May be less expensive as many initial costs are known
Medium lead time from planning to completion
Inherent value in existing building increases opportunity for financing
May require creativity/compromise on program

8. Renovation of Office Space
Prior Dr. offices, campus built in pods

9. Facility Archetype #3 Modular Buildings $6-8 on average per sq ft
Generally, easiest option to finance
Lowest on average ongoing (usage) cost
Shortest lead time from Planning to Completion
Requires site development approval and work, infrastructure (power, water, etc.)
Additional costs to commission and decommission
Most schools transition out over time, impacting short term vs. long term program needs

10. Modulars
Rent or Rent to Own
Can add on during growth phase

11. Facility Archetype #4 Temporary/Shared Site
Cost varies and is unique to situation
Generally, no financing is required unless renovations/restoration to site is needed
Site dynamic has large impact on program

12. Shared Space School inside a preexisting structure Share common area
Share lab
Share conference rooms
Flex space office buildings $5-$15 per sqft. Some include shared receptionist, virtual office admins, rental fee of conference rooms at $200-$250 per usage

13. Facility Related Considerations Impacting Budget and Program
Zoning
Traffic
Ingress/Egress
Safety
Parking
Expansion
Impact of Location and Type of Facility

14. Virtual Considerations
virtual charter school must offer “regular educational opportunities” to its students through meetings with teachers, educational field trips, virtual field trips attended synchronously, virtual conferencing sessions, or asynchronous offline work assigned by the teacher of record
Onsite commons area with conference rooms or shared space
Offsite gathering areas?

15. Financing Options Conventional Loan 80-90 % Loan to Value (LTV)
Usually requires strong financials with 3+ years of operation, cash for 10%-20% down payment, and possibly a Guarantor
May require additional organization(INC) as current law does not support charter school acquisition of capital assets that may increase in value
Current rates 2.5%-3.5% variable, 3.5-5% fixed

16. Financing Options Developer Financing
Financing may be tied to specific site/project
Most often project translates into long term lease
Common Area Maintenance(CAM) and lease escalator (sometimes tied to GDP) will increase cost
9-10% CAP (Capitalization) rate is market standard
May require Guarantor

17. Financing Options Public Bond Offering Can borrow 100%+ of project
Interest rates/terms based on “rating” (S&P)
Requires intensive review of school and project
Public approval (city or county)
Large upfront cost which may be partially added to Bond
Long term amortization 5-30 years
Bond becomes first in line for revenues

18. Financing Options Private and Public Charter School Capital Firms
Knowledgeable about Charter Schools
95% of all charter schools qualify for some type of financing
Service includes program fee as well as “discount” on accounts receivable (school revenue), generally equates to current cost of capital (10%)
Short term interest only payments with a 5 year balloon and refinancing option

19. Thank You and Good Luck!
Justin Matthews, Executive Director (954) Jennifer Lucas, Managing Director (954)