In this webinar, the speakers discuss the charter school facilities landscape and how to properly plan a facilities project. They touch on how to balance your team’s facility dreams with your budget and even share some pitfalls you can avoid so you can take away actionable insights on what considerations you need to make when planning a facility project for your school.

1. 1
Essential
Steps to
Facilities
Planning

2. 2
Freddy Mendoza
Founder & Teacher
Arizona College Prep Academy
Jon Dahlberg
VP of Business Development & Facilities
Charter School Capital
Today’s Speakers

3. • Assess - Balancingfacilities
dreams and budgetrealities
• Plan – Setting a realistic
timeline
• Fund - Fundingapproval - keys
areas of focus
• Acquire – Finding the right
site & funding option
• Design – Partnering with the
right experts and setting a
construction schedule
• Execute - Project execution and
timing
3
How to Plan for
Your Next
Facility

4. • Understand your
wants VS needs
• Assess the amount
of space you need
• Determine your
budget
4
Assess

5. Access
5
• Total Space is a combination of what
you NEED and what you WANT
• Need is a function of your charter
• Want is a function of what you can
afford
Tip: Don’t underestimate the impact of
common and administrative space
• Make sure you account for bathrooms,
hallways, offices and conference rooms

6. Assess
6
WANT – NEED - BUDGET
What can we afford? What is required?
Existing reserves Academic mission
Ongoing % of revenue Growth plan for
attendance
Fundraising –
public/private
Specialty requirements
Funding alternatives Local considerations

7. Assess
7
$0mm
$2mm
$4mm
$6mm
$8mm
$10mm
$12mm
$14mm
$16mm
$18mm
$20mm
$0mm $2mm $4mm $6mm $8mm $10mm
Potential
Project
Budget
Annual School Revenue
Facilities Budget vs. School Revenues
10% Facilities Cost/Rev 15% Facilities Cost/Rev 20% Facilities Cost/Rev

8. • Set a realistic
timeline
• Prepare for
setbacks
• Make a list of must-
have features
8
Plan

9. Plan
9
• Assume that any building or renovation project
will take much longer than expected.
• A facility expansion or move will likely involve
your entire team, and the goal is to minimize
disruption to your students and academic
programs.
Tip: Learn from Other Schools
• Find out how long it’s taken other schools to
accomplish similar projects so you can be
realistic and plan for a smooth transition process.

10. Plan
10
• What is absolutely necessary for your school in
order to serve your students and fulfill your
mission?
• If your charter requires your school to have a
ballfield, an art room, or adaptive PE equipment,
you’ll save time by disqualifying sites that can’t
support these features at the outset.
Tip: Revisit Your Charter
• Go back to your charter, your mission, and your
board of advisors and dive deeply into what your
facility must have to carry out your mission—this
may require making some tough choices.

11. • Know your options
• Weigh the pros and
cons
• Assess which option
is best for your
school
11
Fund

12. Developer
Long-term Lease
Bank
Long-term Lease
Bond
Long-term Lease
Bank
Short-term Lease
Long-term Lease
Developer
Fund
Criteria Cash Bank Bond Long Term Lease
Cash needed to
close
$7M $2.1 – 2.8M ~$200 – 500K $0 – 100K
Annual cost
(example)
$0 $350 – 700K $600 – 800K $630 – 700K
Underwriting None Min 5 yrs
Surplus
Assets + Revenue
Min 3 yrs
Debt coverage
Surplus
Rating?
No minimum
Academic success
Flexible
Security interest None Real estate + all
assets
Real estate + all
assets
None
Growth options Cash =
Build
Refinance risk
Rate risk
10 yr minimum
Refinance risk
Covenants
Scalable,
expandable
Considerations/
challenges
Reserves? 20+/- 40% equity
5-20yr term and
amortization
100% financing
Transaction
costs
“Road show”
100% financing
No amortization
Buy back
12
Note: $7 million project example; bank assumptions 6-8% interest on debt, 30-40% equity, 10-20yr amortization; bond assumptions 6-9% interest rate, 18% transaction cost/additional financing,
30yr amortization; lease options assumptions 100% financing, 9-10% cap rate.

13. # of Years of Operation
$ Size of
Financing
Large
Small 0 10+
Developer
Long-term Lease
Bank
Long-term Lease
Bond
Long-term Lease
Bank
Short-term Lease
Long-term Lease
Developer
Alternative capitalsources expand with school/network sizeand
maturity 1st Renewed Charter
$7 -10mm
Fund
13

14. 14
Fund
Security Interest
Growth Options
Underwriting
Annual cost
Cash needed
Criteria Cash BondTraditional Bank Long Term Lease
Comparison for illustrative purposes only. Rankings are based on how hypothetical “School A” might view its options based
on unique attributes and objectives.
Example Project - $5 Million

15. 15
Fund
Security Interest
Growth Options
Underwriting
Annual cost
Cash needed
Criteria Cash BondTraditional Bank Long Term Lease
Comparison for illustrative purposes only. Rankings are based on how hypothetical “School A” might view its options based
on unique attributes and objectives.
Example Project - $20 Million

16. • Leasing VS Purchasing
• Find your site
• Understand how
requirements stack up
against restrictions
16
Acquire

17. Acquire
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• Lease versus purchase is really
about control versus ownership
o Management time and expertise
o Long-term real estate trends in the
local market
o Fluctuations of the broader market,
which may limit future growth

18. Acquire
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• If the building you want is not zoned for education, you
should strongly consider if this building is really for you.
In some areas, charter schools are allowed to operate
by right in certain zones, but may need to apply for a
permit in another zone.
Tip: Anticipate Zoning Challenges
• Consult with other successful charter schools, land-
use attorneys and experienced consultants in the
charter space

19. • Decide on approach
• Selecting the right
team
• Obtain building
permits
19
Design

20. Design
20
• Consider your circumstances and the option that would
be least expensive and disruptive for your students.
• Making gradual renovations to support growing
enrollment in a long-term lease situation is very different
than building a school from the ground up.
Tip: Consider Enrollment & Costs
• There’s no requirement that everything has to be done
all at once if you have enough room for your students
and there’s not a significant financial disadvantage.

21. Design
21
• Choose architecture, engineering, and construction
professionals who are experienced in charter schools and who
can adapt to your project.
• Your expertise is educating children—you don’t want the
distraction of having to micromanage contractors or designers
and guide them through the process of building or renovating a
school.
Tip: Ask for Help
• Charter School Capital and other good funding partners can
connect you with professionals who have proven charter school
facilities experience and can provide the advice you need.

22. Design
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• After those zoning and land use permits, there’s more essential
paperwork.
• Most big projects require building permits regardless of whether
you’re building a school from the ground up or renovating.
• Make sure authorizer knows why and what you are doing
Tip: Don’t Be Caught Off Guard by Surprise Paperwork
• Ask your funding partners, commercial real estate agent,
designers, and contractors about the permits that you’ll need.
Keep a list and factor them into your timeline so you always know
what to expect.

23. • Decide on a Project
Manager or Owner’s
Representative
• Move-In!!!
23
Execute

24. Execute
24
• You have options about who will oversee the day-to-daylogisticsof your
project.
Project managers: typicallywork forthe contractorand focuson keeping the
projecton schedule and on budget.One constructionprojectmay involve several
project managers involved atdifferent phases,and theyare typicallyincluded as
part ofthe costof a general contractor’sservices.
Owner’s representatives:theseare independent third-partyprofessionals that
look outfor your bestintereststhroughoutevery phase ofthe project,including
siteselection,design, construction,and relocation. Retaining an owner’s
representative isan additional cost.They canhelp yourschool avoid typical
pitfalls,findways to lower costs,and coordinate bidding. In thecase ofa lease,an
owner’s representative ensures thatthelandlord stayson budget and on
schedule.

25. Execute
25
Plan Construct
DesignAcquire
 Space
Programming
 Features
 Budget
 Timeline
 Charter
approvals
 Select team
 Design/build
options
 GC bidding
 Bldg. permit
 Timing; big bang
or phased
 Locate Site
 Requirements +
restrictions
 Leasing/purchasing
 Acquisition
 Use Permit
 Land prep
 Move dirt
 Raise the roof
 Control: Project
manager or
owners rep
Fund
 Cash
 Bank
 Bond
 Lease

26. Execute
26
• Creating an in-depth plan can help to smooth a complex
transition and help your students and staff know what to
expect.
• Moving is always challenging! If you’re relocating to another
facility, try to do it during the summer or another significant
school break. Hold an open house and give tours to your
students and their families in advance of the school year.

27. Execute
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Tip: Communicate Often with Your Students (and their
Parents!)
• Whether you’re moving or renovating, show your
students and families videos and pictures of the
construction progress, and tell them what they can
expect from the new facility, including exciting
developments and any changes that they need to be
prepared for. You may gain some volunteer help
along the way!

28. 28
Thank You!
Freddy Mendoza
fmendoza@arizonacollegeprep.com
Arizona College Prep Academy
Jon Dahlberg
jdahlberg@charterschoolcapital.org
Charter School Capital