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The Massachusetts Board of Elementary and Secondary Education

Charter Schools - Approval of Loans beyond Charter Duration

(Match Public Charter School, Hilltown Cooperative Charter Public School, Academy of the Pacific Rim Charter Public School, Conservatory Lab Charter Public School, Bridge Boston Charter School, Pioneer Charter School of Science, Rising Tide Charter School, KIPP Academy Lynn Charter School)

To:
Members of the Board of Elementary and Secondary Education
From:
Mitchell D. Chester, Ed.D., Commissioner
Date:
December 9, 2016

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Under the charter school statute, G.L. c. 71, § 89(k)(6), a charter school may incur temporary debt in anticipation of receipt of funds. The charter school must receive approval of the Board of Elementary and Secondary Education (Board) if it wishes to agree to a term of repayment that exceeds the duration of the school's charter. At its meeting on October 21, 2008, the Board voted to delegate to me the authority to approve such loan requests. I am informing the Board of eight such approvals.

In a letter dated January 21, 2016, the board of trustees of the Match Charter Public School (Match) requested approval to enter into a repayment agreement with the Match Foundation (Foundation). The school was awarded Qualified Zone Academy Bonds (QZABs) for $2,337,000. The Foundation will purchase the QZABs on the school's behalf and Match will repay the Foundation for a term of up to thirty years. Match reported that the funds will be used to reconfigure its current facility, located at 1001 Commonwealth Avenue in Boston, to better accommodate its students.

In a letter dated February 3, 2016, the board of trustees of the Hilltown Cooperative Charter Public School requested approval to enter into a loan agreement for $3,550,000. The loan is from the USDA Rural Development Community Facilities Loan Program with a term of 40 years. The loan will be used to purchase property at 1 Industrial Parkway in Easthampton and will save the school $100,000 a year and provide much needed outdoor play space.

In a letter dated June 5, 2016, the board of trustees of Academy of the Pacific Rim Charter Public School (APR) requested approval to refinance its existing bond debt of $11,500,000 for the school's current location at One Westinghouse Plaza, Hyde Park. This refinancing will consist of direct purchase bonds from Citizens Bank issued through the Massachusetts Development Financing Agency. The loan will not go beyond a term of 30 years. The refinancing of the current debt will allow APR to realize $300,000 in annual savings that the board of trustees will reallocate to the academic program.

In a letter dated June 24, 2016, the board of trustees of Conservatory Lab Charter School requested approval to enter into a loan agreement for $3,300,000 for the purchase of property located at 127 and 131-133 Hancock Street in Boston. Eastern Bank will provide the loan to the Conservatory Lab Charter School Foundation in connection with tax exempt bonds with a repayment term of up to 10 years. The loan was used to acquire the property and for repair, renovations, and to refinance any acquisition debt.

In a letter dated July 1, 2016, the board of trustees of Bridge Boston Charter School (Bridge) requested to change the term of their previously approved loan from 30 years to 31 years. Bridge used this loan to acquire its permanent facility at 435 Warren Street in Roxbury.

In a letter dated September 12, 2016, the board of trustees of Pioneer Charter School of Science (PCSS) requested approval to enter into a loan agreement that will not exceed $1,160,000. Eagle Bank will provide the loan, with a term of up to 10 years, to the Friends of PCSS. The loan will be used to purchase a building located at 466 Broadway Street in Everett, a permanent location for administrative offices.

In a letter dated October 18, 2016, the board of trustees of Rising Tide Charter School requested approval to enter into loan agreements for up to $17,950,000. The loans will be acquired by the Plymouth Rising Tide Foundation Corporation with the terms that follow. In connection with tax exempt bond financing, Webster Massachusetts Security Corporation will provide a loan of up to $12,300,000 with a term of up to thirty years. The United States Department of Agriculture will provide a loan in the amount of $5,500,000 with a term of up to forty years. Massachusetts Development Financing Agency will provide a loan in the amount of $150,000 with a term of up to five years. The loans will be used to purchase a building at 59 Armstrong Road, Plymouth, and for site work, renovations, furniture, and equipment.

In a letter dated November 7, 2016, the board of trustees of KIPP Academy Lynn Charter School requested approval to enter into a loan agreement for $5,700,000. The KIPP Lynn Fund will acquire the loan funded by a new tax exempt bond issued by Massachusetts Development Finance Authority and purchased by Citizens Bank with a term of ten years. The loan will be used for the expansion of the school's building located at 90 High Rock Street in Lynn.

This memorandum provides written confirmation of my approval, pursuant to G.L. c. 71, § 89(k)(6), of terms of repayment for the loans described above, which exceed the durations of these schools' charters. The Department has reviewed these requests and they are reasonable and consistent with the charter school statute and regulations. These approvals in no way reflect either the accountability status or the potential outcome regarding charter renewal for these charter schools. Approval is explicitly conditioned upon the inclusion of the following language in all of the loan agreements:

The parties to the loan(s) acknowledge and agree that the Commonwealth of Massachusetts, including but not limited to the Board and the Department of Elementary and Secondary Education, provides no representations or guarantees with respect to these loans and has no liability for any portion of the loans. Furthermore, specifically and without limitation, approval of the loan has no impact on any action that the Massachusetts Board of Elementary and Secondary Education may choose to take in the future with respect to probation, revocation, or renewal of the school's charter.

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If you have any questions regarding these matters or require additional information, please contact Alison Bagg, Director of Charter School and School Redesign (781-338-3218); Cliff Chuang, Senior Associate Commissioner for Educational Options (781-338-3222); or me.



Last Updated: October 3, 2014
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