Facilities

Charter operators are responsible for finding their own school site. Finding sites that are available, appropriate and affordable can be difficult, and creative solutions are often needed. Charter leaders should think “outside the box” when exploring facilities. This section includes numerous examples of how Minnesota charter leaders have demonstrated this creativity in finding and creating spaces that meet the needs of their programs. Facilities related expenses, including rent, utilities, maintenance, cleaning, insurance, etc., will constitute a significant part of your budget. It is important that you consider this issue very carefully.

This section covers the following topics:

• The Minnesota Charter School Law
• Facilities Financing
• Finding Space that Meets Your Program’s Need
• Regulatory Compliance
• Examples of Minnesota Charter Facilities (under construction)
• Resources

1. The Minnesota Charter School Law (M.S. 124D.10 and 11)

• Leased Space. A charter school may lease space from a board eligible to be a sponsor or other public or private nonsectarian organization. If a charter is unable to lease appropriate space from an eligible board or other public or private nonprofit nonsectarian organization, the school may lease space from another nonsectarian organization if the Department of Education, in consultation with the Department of Administration, approves the lease. If the school is unable to lease appropriate space from public or private nonsectarian organizations, the school may lease space from a sectarian organization if the leased space is constructed as a school facility and the Department of Education, in consultation with the Department of Administration, approves the lease. (M.S. 124D.10, subd. 17)
• Related Party Lease Costs. A charter school is prohibited from entering a lease of real property with a related party as defined in this subdivision, unless the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter 308A, and the lease cost is reasonable under section 124D.11, subd.4, clause 1. (M.S. 124D.10, subd. 23a)
• Building Lease Aid. When a charter school finds it economically advantageous to rent or lease a building or land for any instructional purposes and it determines that the total operating capital revenue under section 126C.10, subdivision 13, is insufficient for this purpose, it may apply to the commissioner for building lease aid for this purpose. The commissioner must review and either approve or deny a lease aid application using the following criteria:
  • the reasonableness of the price based on current market values;
  • the extent to which the lease conforms to applicable state laws and rules; and
  • appropriateness of the proposed lease in the context of the space needs and financial circumstances of the charter school.

  A charter school must not use the building lease aid it receives for custodial, maintenance service, utility or other operating costs. The amount of building lease aid per pupil unit served for a charter school for any year shall not exceed the lesser of (a) 90 percent of the approved cost or (b) the product of the pupil units served for the current school year times the greater of the charter school’s building lease aid per pupil unit served for fiscal year 2003, excluding the adjustment under Laws 2002, chapter 392, article 6, section 4, or $1,200. (M.S. 124D.11, subd. 4)

• Use of state money. Money received from the state may not be used to purchase land or buildings. The school may own land and buildings if obtained through nonstate sources. (M.S. 124D.11, subd 7)
• Other aid, grants, revenue. A charter school may receive money from any source for capital facilities needs. In the year-end report to the commissioner of education, the charter school shall report the total amount of funds received from grants and other outside sources. (M.S. 124D.11, subd 6(d))

2. Facilities Financing

Minnesota charter schools receive state funds to help cover the cost of leasing space (“lease aid”). (M.S. 124D.11, subd. 4) The law prohibits schools from using these or any other state funds to purchase real estate, so almost all schools rent their facilities. (M.S. 124D.11, subd. 7) Schools are allowed to own their own buildings, as long as they do not use state funds to pay for them.

For the 2004-2005 school year, schools will be eligible to receive lease aid in the amount of the lesser of $1,200 per student or 90% of the lease. In addition to their main facility, schools may use lease aid to pay for the cost of renting space off-site for program activities-e.g., space at the YMCA for physical education. For more information about the requirements and process for lease aid, please see the attached memo from the Minnesota Department of Education. (If you are interested in more than a general overview, please consult MDE for the most up-to-date information.)

Charter school facilities financing has become a critical issue around the nation. It is very difficult to find appropriate, affordable space. Policy makers and others are growing increasingly concerned about the proportion of a school’s resources (both financial and human) that are absorbed by the facilities issue, and thus unavailable to support teaching and learning directly. In response, a variety of strategies are being developed to help charter schools meet their facilities needs. These include, for example, credit enhancement programs (which provide loan guarantees for facilities related expenses) and other vehicles for making space available to charter schools. Since Minnesota charters typically don’t own their facilities, credit enhancement can be used to support building renovations. Because it takes several years for a charter school to build its credit rating, credit enhancement helps schools get financing at a lower rate than they could on their own. Two organizations that are willing to provide credit enhancement to Minnesota charter schools are the Charter School Development Corporation and the National Cooperative Bank Development Corporation. In addition, the Charter School Development Corporation has a small program through which it can buy buildings to lease to schools. The school identifies the property and is involved in any renovations, which helps ensure the property is designed to meet the school’s needs. See the resource section for other information about facilities financing.

3. Finding Space that Meets Your School’s Needs

Facilities is one area where charter applicants and operators can test their ability to be creative, flexible and visionary. Ideally, one would look for a facility in a convenient location, with a healthy physical plant, suitable for or adaptable to the most conducive learning setting, and available or affordable. Some are fortunate to have access to available district facilities already designed on a classroom model. Unfortunately, such is rarely the case. Rather, many charter school operators have had to improvise and compromise in securing a location for their school. Some share space with other schools or organizations. Others have converted unused retail space in malls. One charter rented space in a local restaurant, clearing out the classrooms every Friday so it could conduct its weekend business. Another provides physical education classes at the local Y. Another rents out a church basement. (The Charter Workbook, Center for Education Reform, p. 224)

The Pioneer Institute in Massachusetts advises charter operators to keep in mind that less than ideal interim facilities can provide a viable temporary solution until they can find, negotiate and renovate more suitable space. “Consider everything and keep in mind that where you start does not have to be where you finishIt is the task of the creative organizer to mold available sites to reflect the mission, curriculum and enrollment of the charter school. The ability to cut costs creatively without cutting corners characterizes the most successful charter school organizers.” (Massachusetts Charter School Handbook, Fourth Edition (1999), p 58) Facilities offer one more area in which to involve community and call on local organizations to contribute to the education of the next generation:

• Enlist the expertise of realtors, architects, businesses, etc. in efforts to find and prepare a facility for opening day.
• Approach organizations to donate or lease their available facilities at an affordable rate.
• Consider making use of spaces that are in use, but vacant during the school day.
• Borrow (contact and contract with) community resources already available nearby, rather than providing them directly. (The Charter Workbook, Center for Education Reform, p. 225)

Acquiring facilities can present charter developers with a challenging dilemma. It is often difficult to recruit students if there is no facility. On the other hand, schools are (and should be) reluctant to lease space before they have a good idea of their enrollment numbers. Schools need to both engage in an aggressive marketing campaign (with follow-up to make sure the students you recruit actually enroll) and look for a facility as early as possible.

The following information provided by St. Paul charter leader Wayne Jennings could be used as a rule of thumb when exploring facilities options. See also, MDE’s Guide for Planning School Construction for additional suggestions.

Amount of Space

• Amount of space per student in a conventional elementary school -100 sq. ft.
• Amount of space per student in a conventional secondary school -150 sq. ft.
• Amount of total space allocated for classrooms in conventional schools-50%
• Classroom size, with 25 students in a class-750-900 sq. ft.Costs
• Leasing commercial space – approximate cost (possibly without taxes, utilities, and insurance) – $7-14/sq.ft/year
• Utility Costs(including heat, light, sewer, water) – $1.50/sq.ft./year
• Real Estate Taxes – $1.50/sq.ft/year
• Casualty Insurance (covering fire, theft, vandalism, storms) – $0.15/sq.ft./year
• Common Area Maintenance (CAM) fee (e.g. in a mall) – $1-2/sq.ft./year
• Minor Maintenance & Repairs – $1500/year
• Cleaning – $0.70/sq.ft./year
• Security monitoring – $60/mo.
• Furniture (new) – $100/student
• Liability Insurance – $600-800/year
• Remodeling – $10-50/sq. ft.

In addition, below is a list of factors to consider when looking at potential charter school sites:

• Amount of space (room for expansion?)
• Location
• Enrollment area
• Transportation of students
• Appropriate space
• Decent
• Meets program needs
• Outdoor play space
• Parking
• Zoning
• Meets code?
• Handicapped accessibility
• Food handling
• Safety Requirements
• Fire, tornadoes
• Streets and bus handling
• Equipment
• Bus loading
• Amount of traffic
• Costs
• Leasing
• Taxes
• Maintenance, upkeep, repairs
• Cleaning
• Grounds: grass, snow
• Remodeling
• Wiring
• Ventilation
• Bathroom

• Types of Rooms
• Kindergarten
• General classrooms
• Specialized classrooms:
• Science
• Art
• Music
• Physical Education
• Library/media
• Computer
• Special education
• Tutorial
• Home economics
• Industrial arts
• Photography
• Dance
• Auditorium
• Clubs/activities
• Administrative/Support
• Reception
• Secretarial/ Office workroom
• Nurse
• Guidance
• Conference
• Food service
• Custodial
• Teacher workroom
• Storage
• Administrator(s)
• Curriculum support

Among the most important (and often overlooked) factors to consider when selecting a site is student transportation. Is the school on a public bus line? If students will be driving, is there adequate parking? If students will be arriving by school bus, consider the following:

• Are school buses allowed to stop on the streets around the site or must they load and unload in a parking area?
• Will street loading and unloading interfere with rush hour traffic? If so, what times will be impacted?
• Will businesses or residents in the area ask the city to limit the times and places where buses can unload and load?
• Will the loading and unloading, block access to alleys or other private drives?
• Will signs need to be installed to alert motorists and others that there is a bus loading/unloading area on the street?
• Is there an area for buses to stack up – waiting to either load or unload?

In planning, developing and implementing school construction projects, school districts must comply with a complex variety of state, federal, and local, laws, rules, and codes. It is very important that school boards employ licensed, knowledgeable and competent persons to represent the school district (administrators, architects, engineers, contractors and construction managers, fiscal consultants, attorneys) to represent the school district through this process. The highlights of many of the laws, rules, and codes that school districts must comply with are discussed throughout this Guide. Responsible persons representing the school district must further consult building code, fire safety, indoor air quality, and other laws, rules, ordinances and codes, as appropriate.

In proceeding with school construction projects, school board members must be aware of the responsibility they have to make sure that all the orders that they sign are legal; i.e., comply with all laws, rules, and codes affecting school construction projects. (M.S. 123B.17)

Guide for Planning School Construction, Minnesota Department of Education, 15.

• square foot requirements,
• health and safety requirements,
• accessibility requirements to accommodate students with disabilities,
• construction materials, including asbestos or other materials deemed hazardous,
• plumbing, electric, and water utilities,
• outdoor spaces,
• parking, walkways, doors windows, ceiling heights,
• air quality, heat supply, cigarette smoking,
• lighting,
• number of bathrooms, and
• what floors young children can be located.

• A crucial resource for Minnesota charter schools is building lease aid, first approved by the 1997 legislature. The 2004-2005 requirements and processes for lease aid are discussed in detail in the attached memo from the Minnesota Department of Education. Includes a health and safety standards checklist.

• The Minnesota Association of Charter Schools can help schools with a variety of facilities related issues, including property procurement, lease negotiations, facility assessment, business planning, financial planning, leasehold improvement negotiations and facility mediation services. For more information, contact Norm Chaffee at 651-644-0432 ornchaffee@ncbdc.org.

• For information about accessibility requirements for students with disabilities, see “Selection of Facilities to Provide Access to Students with Disabilities,” sections 16-19 of Applying Federal Civil Rights Laws to Public Charter Schools, a joint publication of the U.S. Departments of Education and Justice (2000).ed.gov/offices/OCR/archives/charterqa/characcess.html

• Charter School Facilities: A Resource Guide on Development and Financing 
  Charter Friends National Network and National Cooperative Bank Development Corporation (2000).
  A step-by-step overview of the facilities process, from business planning, needs assessment, and site selection through financing and construction.
  Available online at ncbdc.org/ncbdc/ncbdcv3.nsf/docadd/educhschguidedoc.htm

• The Guide for Planning School Construction Projects in Minnesota 
  Minnesota Department of Education, January 2003.
  Available on the MDE website at education.state.mn.us/content/003023.pdf

• Smaller, Safer, Saner Successful Schools 
  Center for School Change, 2001.
  A report with case studies showing how small schools and shared facilities have increased student achievement and safety, while developing stronger community support and involvement in the schools.

• The Minnesota Department of Education’s website has an extensive collection of valuable facilities-related resources. See education.state.mn.us/html/intro_finance_facil.htm

• Minnesota Charters Breaking New Ground On Facilities
  Article by Jon Schroeder, Charter Friends National Network (1998)
  Available online at charterfriends.org/mnfacilities.html

• Charter School Development Corporation, csdc.org
  1090 Vermont Avenue, NW
  Suite 800
  Washington, DC 20005
  (202) 454-9919
  Credit enhancement and other resources to support charter schools facilities needs.
  Contact: Michelle Liberati, Vice President, Michelleliberati@csdc.org.

• NCB Development Corporation, ncbdc.org
  1725 I Street, NW
  Suite 600
  Washington, DC 20006
  (202) 336-7749
  Credit enhancement and other resources (including loans) to support charter school facilities needs. Also provides equipment financing.
  Contact: Norm Chaffee (Minnesota contact),nchaffee@ncbdc.org.

• The Finance Gap: Charter Schools and their Facilities
  Institute for Education and Social Policy, Steinhardt School of Education, New York University (Educational Facilities Financing Center of the Local Initiatives Support Corporation, 2004)
  A study of nontraditional facilities financing for charter schools.
  Available online at lisc.org/resources/2004/03/facilities_6781.shtml?Social+&+Economic+Development

• Out of the Box: Facilities Financing Ideas for Charter Schools
  Charter Friends National Network, 1999
  Available online at charterfriends.org/outofbox.html

• Paying For the Charter Schoolhouse: Policy Option for Charter School Facilities Financing
  Charter Friends National Network and North Central Regional Educational Laboratory.
  Available online at http://www.charterfriends.org/.