Charter School Capital's Bridge Financing Solution

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Copyright © 2019 Charter School Capital, Inc. All Rights Reserved.
BRIDGE
FINANCING
SOLUTIONS
FOR CHARTER
SCHOOLS

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AGENDA  Who we are
 Bridge Financing
oWhat is it?
oWhy is it critical?
oHow can CSC help?
 Additional Resources
TODAY WE’LL COVER:

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•
WHO WE
ARE
 Charter School Capital helps schools access,
leverage, and sustain the resources charter
schools need to thrive, allowing them to focus
on what matters most – educating students.
 In the past 12 years, we have:
o Served more than 1,000,000 students
and their families
o Supported more than 700 charter schools
o Invested $2B in helping charter schools
better serve their communities
 Facilities financing arm supports charter
leaders with long-term leases
o Over 40 schools across the country
o Tenant improvements and energy
services
 More than 50 employees headquartered in
Portland, OR
 Stellar track record with schools and
investors
COMPANY OVERVIEW

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 Graduate of Bethel University with a
Bachelor’s in Accounting
 More than 25 years of experience in
financial services
 Leads Charter School Capital’s facilities
efforts related to acquisition and strategic
relationship management
Jon Dahlberg
VP of Business Development and
FacilitiesABOUT
ME

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Bridge financing is designed to help schools with
short term pre-development and development
investments needed in advance of long term /
permanent facilities financing so you can maintain
your growth plan
Bridge Financing: The what and why
 Up to 100% financing available
 Schools can use funds for a variety of
purposes:
 Land acquisition
 Permitting
 Design fees
 Third party reports
 Pre-construction
 Pre-open marketing expenses
 Customized disbursement and
repayment schedules based on major
project milestones
BRIDGE
FINANCING

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WHAT IS YOUR FACILITY DREAM? KIDS, SMILES, LEARNING
Growth
Stabilization

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BUT, THAT IS JUST ONE STEP IN THE PROCESS
Growth
Stabilization
3. Long-Term Control / Occupancy (Nirvana)2.1.
Long-Term Control / Occupancy:
 Mature organization
 Stable location
 Little-to-no expectation for facilities growth
Considerations:
 Understand the total cost of “ownership”
vs. “control”
 Looking for a strong long-term, cost
effective solution and partner
 Should allow the school leadership
flexibility to operate, evolve, and change
Bridge Financing Long-term Financing

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DEVELOPMENT PHASE = LARGE TEAM = TIME = RISK
1.
Growth
Stabilization
2. Development /
Construction
3. Long-Term Control / Occupancy (Nirvana)
Development / Construction Phase:
 Schools can engage developers, contractors,
bankers, bond brokers, underwriters, and
other partners in this phase to help renovate
or construct a school
Considerations:
 For an acquisition, is the facility already
designed as a school?
 Does it meet all of the local, state, and
federal requirements?
 Does it have the required life safety
specifications and desired features?
 Will a landlord fund Tenant Improvements
(TIs)?
Bridge Financing Long-term Financing

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ACQUISITION / PRE-DEVELOPMENT = EXTERNAL FORCES
1. Acquisition /
Pre-Development
Growth
Stabilization
2. Development /
Construction
3. Long-Term Control / Occupancy (Nirvana)
Bridge Financing
Pre-Development Phase:
 Before acquisition or development,
schools may need to acquire land, pay for
pre-development costs
Considerations:
 When developing a new site, do you already
own the site?
 Will you have enough time to get the site
zoned and permitted for a school that needs
to open on your timeframe?
 Will a developer or long-term capital partner
fund required expenses? (e.g., entitlements)
Long-term Financing

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WHAT IF GETTING TO “NIRVANA” IS DELAYED?
 Paying for delays (Hard Costs)
o Rent or debt service on two locations (old site and new site)
o Expedited construction timelines (e.g., overtime pay)
 Reputation damage, lost momentum, erosion of trust from delays (Soft Cost)
o Attrition at a current location
o Fewer students attending your new site due to delays in opening
o Attrition due to having to use incomplete or inadequate temporary facilities
o Loss of potential education staff talent

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KEY COSTS REQUIRED TO GET TO “NIRVANA”
1. Acquisition
 Site selection is key in any real estate plan and schools are no exception (location,
location, location)
o Proximity of target students to your school
o Schools need to aware of traffic patters
o Aware of potential competitors (traditional public / charters)
o Free from harmful pollutants (toxic waste, liquor stores, THC dispensary)
2. Pre-Development
 Zoning
 Permitting
 Entitlements
 Survey work
 Sitework

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CSC CLIENT CASE STUDY
Planned
Location
North Killingsworth Street
NorthInterstateAvenue
NorthMarylandAvenue
CONFIDENTIAL
Portland, OR Case Study : School Location Consolidation Plan
• School is
consolidating to move
to an optimal, larger
facility
• School leadership
has planned for an
acceptable attrition
rate and has
assumed growth at
the new location
Considerations

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CSC CLIENT CASE STUDY
CONFIDENTIAL
Target
Consolidated
Location
Current
Location 2
Current
Location 1
What are the costs of
delaying a planned
consolidation?
• The cost of not
executing was a
potential school
closure
Solution:
• Charter School
Capital provided
bridge financing just
over 60 days to keep
the school
consolation plan on
track
Portland, OR Case Study : School Location Consolidation Plan Considerations

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OUR ADDITIONAL SERVICES HELP SUPPORT SCHOOLS
THROUGH THIS TRANSITION PERIOD
 100% of our work is with Charter Schools
 We work with schools to help execute on growth plans:
o Enrollment marketing services
o Growth capital
o Advisory services
o Facilities upgrade services
 We can even assist in case things don’t go according to plan

QUESTIONS?

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THANK YOU!
CONTACT ME:
JON DAHLBERG
jdahlberg@charterschoolcapital.org

Addendum

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 Address unexpected budget shortfalls
and state and local payment delays
 Purchase and operate buses or other
transportation
 Implement and operate safety and
security systems
 Upgrade technology in the classroom
WORKING
CAPITAL
Short-term financing to better manage cash flow
for operations, programmatic expenses, or other
obligations
To date, we’ve financed more than $1.9 billion
for more than 600 schools and supporting the
education of more than 1 million students.
Working Capital Financing
can be accessed to:
Charter School Capital has been a
valuable resource to our school. It’s
like working with a bank, but easier.
The customer service is outstanding
and we appreciate all the hard work
the staff renders.
DR. INDIA FORD
T-SQUARED HONORS ACADEMY
Trustpilot ReviewTrustpilot Review
Very professional staff and driven
by helping schools accomplish
their goals. They approach the
working relationship as a
partnership for success.
FRANK YANEZ
PAINTED DESERT MONTESSORI
Trustpilot Review
Love the staff, service,
friendliness, partnership, and
commitment from Charter School
Capital. Highly recommend!
DAWN WILSON
OLIVE GROVE CHARTER SCHOOL
CONFIDENTIAL

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 Hire and train staff
 Purchase new technology
 Build or expand on existing programs
(e.g., athletic program, STEM lab, etc.)
 Purchase and operate buses or other
transportation
START-UP
AND
GROWTH
CAPITAL
Fuel expenses tied to expanding
enrollment base:
CONFIDENTIAL

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FACILITIES
Long-term lease financing:
 Finance 100% of project costs
 Retain control of facility
 Long-term affordability
 Enhance existing buildings and
capitalize tenant improvements in lease
 Take-out financing for an existing bond
Our facilities financing product is a long-
term lease that allows schools to access
funding through all stages of growth.
We currently support a portfolio of 42
charter school facilities in 10 states.
CONFIDENTIAL

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CHARTER SCHOOL
ENERGY  Cost Savings
 Flexible enough to work with Bonds and
other debt structures
 Optimize the Learning Environment
oSmart Lighting
oSolar Window Film
oHeating / Cooling and Controls
oRoofing & Envelope
• Reduce environmental impact
• Learning opportunities
Charter School Energy Powered by BioStar
Renewables is a full-service energy upgrade
program with flexible financing options. This
program allows charter schools to access energy
efficiency and renewable energy solutions for their
buildings—improving the learning environment
while reducing utility and maintenance expenses.
Charter School Capital finances the project cost,
with repayment covered by your monthly energy
savings.
THE BENEFITS
CONFIDENTIAL

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ENROLLMENT
MARKETING
Charter School Capital’s Enrollment Marketing
Program staffed by highly experienced team:
 Decades of enrollment marketing experience for
public charter schools
 VP Marketing for k12.com
 VP Marketing for KC Distance Learning
 Charter school student, 10 years in edTech
THE DETAILS
Janet , Ashley and Ben are spearheading Charter School
Capital’s enrollment marketing services
Janet Johnson Ben Scandlen
PAY-FOR-PERFORMANCE OPTIONS:
Schools can opt to pay either per application or per
newly-enrolled students that Charter School Capital
sources and retains during enrollment marketing
efforts.
Ashley MacQuarrie

Charter School Capital's Bridge Financing Solution

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