Education News

Charter School In Houston Gets Creative with School Building, Financing

Over the last decade, the number of students attending charters in Texas has more than tripled. But charter leaders say funding has not kept up with the growth, especially for buildings. And it’s forced them to become creative.


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yes_IMG_2175.jpgThe new campus can serve 1,000 students. Right now it just has grades six and seven.

Step inside the YES Prep White Oak campus in North Houston, and everything looks pretty normal.

There’s a big logo of the school’s owl mascot. Students are lining up for class.

But this place used to be very different: It used to be a shopping center with a grocery.

“We are standing midway of the large box area – originally a Kroger store,” said Keith Weaver, managing director of operations for YES Prep Public Schools, a charter school network in Houston with 9,000 students.

A big part of his job is transforming unusual spaces into schools.

So at this campus, where the customer service area, check-out stands and pharmacy used to be, now it’s the gym, where kids play basketball. Then there’s a hallway that used to be a sidewalk with a canopy in front of a retail store. That’s now space for classrooms.

Some students said they know the history of their school, which opened in 2014, parts of which are still undergoing renovations.

“It used to be a Kroger,” said Mario Guia, 12, on his way to math class. “I would come with my mom and dad to buy groceries.”

yes_IMG_2173.jpgThis former Kroger is now a campus for YES Prep White Oak, which opened last school year.

This kind of remodeling is typical for YES Prep. In some ways, the entrepreneurial approach reflects the original purpose of charter schools: to provide innovation in education.

But it also reflects what charter advocates see as a major challenge: funding for facilities, which they currently don’t receive from the state of Texas.

Weaver explained YES Prep’s strategy is to buy old buildings and given them an extreme schoolhouse makeover.

 “It’s always different,” Weaver said. “We’ve transitioned a five-story bank building, a church, a DHL truck warehouse. We’re currently in the process of working on a furniture store.”

Just as the building approach is creative, so is the financing to pay for the campuses, which cost an average of $12 million.

Robert McBurnett, vice president of finance for YES Prep, said the problem is that while charters are public schools, they don’t receive money for buildings like traditional ones. And they don’t have a tax base like a school district, so it’s harder to raise money through debt.

“No two projects are the same and how we financed them, very few have been financed in the same fashion,” McBurnett said.

yes_IMG_2183.jpgKeith Weaver, managing director of operations for YES Prep, said the design team works through many drafts to convert a space like this into a school.

Generally, fundraising pays for 40 percent of the cost. The rest often comes from debt like bonds. YES Prep can sell government bonds to a private investor, who gets a tax credit. Then the charter school gets a low interest rate of 2 percent or 1 percent.

“So that’s really cheap money, which really allowed us to push more money into our classrooms and not into paying off debt,” McBurnett said.

This is a challenge for charters across the country, as the number of students attending charters has grown. In Texas, the number has more than tripled since 2003.

Reena Abraham tracks charter school financing for a New York-based group called Local Initiatives Support Corporation.

“They have to be so creative that it’s almost inefficient,” Abraham said. “And these are public dollars.”

She said nationally charters use 15 to 20 percent of money meant for the classroom to buy or rent space.

 “That 20 percent, it should be used for the classroom,” Abraham added.

yes_IMG_2188.jpgMario Guia, 12, said he used to shop with his family at the Kroger. Now he’s headed to math class.

She said the good news for charters in Texas, is that if they qualify, they can use the state’s Permanent School Fund as a bond guarantee – which improves their investment rating and reduces the cost of borrowing money.

Still, the Texas Charter Schools Association is pushing for more funding in the state legislature and in the courts. Executive Director David Dunn said $1,000 more per student would be fair.

“Many charters don’t have adequate science labs. They don’t have adequate gyms. They’re having to do P.E. on the parking lot,” Dunn said. “And we think that parents should expect those things from the state of Texas in all public schools.”

So far, a state judge has declined to find the lack of money for facilities unconstitutional.

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