Waltons' $250M set for charters; effort focuses on school construction in Little Rock, 16 other cities

The Walton Family Foundation of Bentonville on Tuesday announced the establishment of a $250 million building initiative to give charter schools in Little Rock and other U.S. cities access to funding for campus construction.

The Building Equity Initiative, described in the announcement as the first-of-its-kind nonprofit effort, will provide low-interest loans as well as a network of resources -- including real estate experts and financiers -- for new and expanding high-quality public charter schools.

The initiative will start with a focus on schools in Little Rock and 16 other cities, including Memphis and Tulsa, where the Walton Family Foundation has provided earlier charter school grants. The goal is to help total charter school enrollment in those cities grow by at least 250,000 by 2027.

The Walton Family Foundation is a philanthropic arm of the family of the late Sam Walton, who started Wal-Mart Stores Inc. The foundation has a long history of supporting charter schools and charter school facilities, having provided as much as $116 million, mostly in the form of low-interest loans, to charter school buildings between 2003 and 2015.

"Before opening their doors, charter schools must find suitable and affordable spaces where teachers can teach and children can learn," Marc Sternberg, the director of the Walton Family Foundation's program regarding kindergarten-through-12th-grade education, said in Tuesday's announcement.

"In many cities, this is the biggest barrier to creating high-quality educational options for children and their families," he added. "The Building Equity Initiative intends to level the capital and policy barriers that prevent charter schools from growing to meet demand from families and communities."

Sternberg presented news of the initiative -- which is intended to make it quicker and easier for charter schools to secure financing -- Tuesday afternoon at the National Alliance for Public Schools conference in Nashville, Tenn.

John Bacon, chief executive officer of Little Rock-based eSTEM Public Charter Schools, welcomed the news that comes as his organization is moving ahead on renovating structures for three new campuses in the next few years.

"Wow," he said. "The Walton Family Foundation has been very generous to us and to other charter schools, especially here in Little Rock. We're getting ready to embark on some pretty ambitious expansion plans, and knowing that the Walton Family Foundation is there to stand behind the charter schools in Little Rock and across the country just definitely gives us more confidence that we'll be more successful in our venture."

The eSTEM system is planning to move its downtown high school -- grades 10 through 12 -- to the University of Arkansas at Little Rock campus starting in the 2017-18 school year. A new kindergarten-through-sixth-grade elementary school and a seventh-through-ninth-grade junior high are planned for 400 Shall St., near Heifer International, to open in 2019.

The system's already existing elementary and junior high schools will remain in operation at Third and Louisiana streets in the former Arkansas Gazette and Federal Reserve Bank buildings.

Details about how soon the Building Equity Initiative money might be available to charter organizations or the specific requirements for qualifying for the funding were not immediately available Tuesday.

But the funding comes at a time when independently operated public charter schools in central Arkansas are expanding.

In addition to eSTEM's plans for more than 2,000 new seats, the LISA Academy charter school system is renovating a former movie theater for an elementary school that will open in August on Westhaven Drive off Bowman Road in Little Rock, opening some 600 new seats for students.

Academics Plus Charter Schools Inc. is improving its existing campuses in Maumelle and opening a new school in a former Pulaski County Special School District school in the Scott community.

And Little Rock Preparatory Academy is seeking state approval to move from a South University Avenue location to the former Lutheran High School site on Markham and South Hughes streets, which offers greater amenities, including a gymnasium and science labs, at a lesser yearly rental cost.

Scott Smith, executive director of the Arkansas Public School Resource Center that supports and advocates for rural schools and charter schools, said Tuesday the new Building Equity Initiative has the potential to make Little Rock more attractive to national charter school organizations.

"We're very pleased and thankful," said Smith in a phone interview from the charter school conference. "Facilities are oftentimes one of the major barriers to being able to recruit or assist in bringing quality charter schools into an area. This can help can bring quality charter schools into the Little Rock market," Smith said, and added, "It can also be used to replicate or grow existing charter schools."

Smith noted that in Arkansas, open-enrollment charter school operators do not have access to revenue from local property taxes that are levied to support traditional school districts and only became eligible for some state facility money in recent years if they are performing well and not on probation or labeled as being in fiscal or academic distress.

That is a $5 million charter facilities grant program, Kimberly Friedman of the Arkansas Department of Education said Tuesday.

"Even with the state facility dollars in play, what we often see is that the price of financing long-term or short-term facility needs is higher than in the traditional school district market," Smith said. "Traditional districts are usually able to finance building costs at a much cheaper rate. Hopefully, this building equity assistance fund will be able to offset some of the costs of risks associated with charter schools compared to traditional school districts."

Others on Tuesday called for close scrutiny of the charter school funding.

Brenda Robinson, president of the Arkansas Education Association -- the state's largest teacher union -- said that teachers and other educators should have a greater voice.

"Our focus should be on investing in strategies that we know help to improve the success of all our students, such as smaller class sizes, parental involvement as well as training opportunities for educators," Robinson said in an email. "We know that while some states have invested more and more in charter schools, they have failed to provide the kind of oversight that would improve student learning ... and the transparency and accountability that parents and local communities deserve."

Baker Kurrus, the Little Rock School District superintendent who opposed the state approval of the eSTEM and LISA Academy charter schools, said Tuesday that he didn't have sufficient details about the building equity initiative to draw many conclusions.

"If it is a loan program, then the terms need to be fully disclosed," Kurrus said. "The underlying security and repayment source will be public monies derived from enrollment, and loans secured by government revenues are typically in high demand. The rent structures, fees, loan terms, collateralization and the like need to be disclosed before I could comment in any detail," he added.

The Walton Family Foundation is partnering with Civic Builders, which is a nonprofit charter facilities developer based in New York City and in operation since 2003 to manage the Building Equity Initiative.

Information about the funding attached to the Tuesday's announcement said that the Building Equity Initiative will increase and not supplant or replace the capacity of existing charter organizations so they can serve more students. The efforts will be customized to the needs in a region as "no one size fits all."

For example, in some cities, the funding could be used to build a "school incubator, which would house multiple new schools while they grow to full enrollment.Elsewhere the money might be used to construct new buildings or renovate older buildings that could be leased to charter schools, information from the foundation said.

In addition to Little Rock, the foundation will first focus on the following cities: Atlanta; Boston; Camden, N.J.; Denver; Houston; Indianapolis; Kansas City, Mo.; Los Angeles; Memphis; New Orleans; New York City; Oakland, Calif.; Oklahoma City; San Antonio; Tulsa; and Washington, D.C.

"Only one in three states with charter schools provide facilities funding, leaving the overwhelming majority of schools on their own to find the resources to pay for a building," the Walton Family Foundation announcement said. "This initiative is only part of the solution. We hope it will attract additional philanthropy, and incentivize public solutions to alleviate the facilities burden that so many charter school leaders face."

A Section on 06/29/2016

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