The Context: Inequitable access to quality school facilities 

Throughout the country, most charter school organizations obtain permanent school facilities without a supporting tax base, government credit ratings, or full access to available properties. 

High-poverty communities and neighborhoods of color have less access to capital and networks of support. This can make the process of opening and sustaining a safe and welcoming school facility a difficult endeavor – one that can curb a school’s growth and limit students’ access to high-quality public school environments. Equitable Facilities Fund launched a call to action and provided the funding to address these disparities and set schools up for strong beginnings. Responding to the call, Afton Partners facilitated a targeted pilot providing technical assistance to two charter schools led by leaders of color.  

The Goal: Prepare financing and secure a long-term facility  

In partnership with real estate experts at QPD, Afton Partners supported school leaders in preparing for financing and acquiring the best possible facility the school could afford. Simultaneously, we sought to equip school leaders with strategic decision-making skills and resources that would serve them in their future financial forecasting and real estate acquisition processes. 

The Approach: Customized services for securing a school facility 

Afton Partners provided end-to-end support tailored to each school’s unique needs. Services included: 

  • Planning for school growth and facility phases 
  • Affordability modeling and enrollment scenarios 
  • School site searches 
  • Facility design and development 
  • Financing preparation 
  • Lease negotiations and execution 

Afton took a context-sensitive approach, applying an understanding of each school’s programs, values, and priorities in every phase. We began by asking “What does success look like for this leader, this school, and this community?” We also consider each leader’s bandwidth, skillsets, and orientation to the work at hand, meeting them where they are and supporting them in moving forward. As such, each school’s path looked different.  

In one case where the developer of an initially identified property was unable to deliver, we supported the search for a new facility and arranged a temporary lease in the meantime.  

Acting as “product agnostic” advisors, Afton and QPD guided school leadership to facility decisions aligned with their values. We worked with the CEO, financing provider, and the school board to build a long-range model that tested for affordability across different scenarios, such as decreased enrollment and fluctuating lease costs. We prepared templates for the roles and responsibilities of different parties that not only served everyone involved in the current execution of real estate acquisition but also provided a roadmap for other leaders pursuing new facilities. Finally, we prepared transaction and financial summaries for the school board, diligence materials for prospective lenders, and presentations for prospective philanthropic funders. When it came time to explore new properties, we were also deeply engaged in the negotiations throughout the process. 

The Outcomes: Significant cost savings, school autonomy, and applicable insights for the field 

Ultimately, one school in our pilot achieved its own location in a high-rent city where schools don’t often own or have permanent building leases. The school negotiated a buyout purchase price—at the school’s option—should they want to borrow and own the facility in the future. Compared to the option of leasing indefinitely—which would expose them to rent hikes with few options for negotiation—the school will experience significant cumulative savings of over $9.5 million by 2030. Further, by adding additional facilitation, negotiation, and analysis capacity, we saved time for the school leader and added comfort and reassurance. 

New and/or small schools don’t typically have in-house CFOs or finance directors. Therefore, financial projections and modeling may not occur before negotiations, which can lead to unforeseen future challenges and unintended consequences. Making facility investments based on accurate data and vetted assumptions allowed for more confidence throughout the process, and provided an eye for contingency plans before they may be needed. That confidence and ability to analyze and use data now serve as an evergreen tool school leaders can use in future decision-making. In this case, the charter school CEO was able to use the financial model to produce new scenarios for funding partners. 

Technical assistance throughout the real-estate execution process set the school leaders up to make informed decisions even when unexpected challenges arose. Real estate acquisition is a highly localized endeavor that requires expertise and multiple parties’ collaboration and coordination. With experienced technical support and the school’s best interests driving all decisions, we developed a customized suite of services that helped the school achieve its goal to secure a high-quality, affordable, long-term home. 

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