District/School Administration Administration
The Massachusetts Board of Education

Approval of Loan Beyond Charter Term for Holyoke Community Charter School and Innovation Academy Charter School

Under the charter school statute, G.L. c. 71, § 89(j)(6), a charter school may incur temporary debt in anticipation of receipt of funds but requires approval of the Board of Elementary and Secondary Education if it wishes to agree to repayment terms that exceed the duration of the school's charter. Two charter schools are requesting this approval this month.

Holyoke Community Charter School

The Holyoke Community Charter School (HCCS) is a Commonwealth charter school in its third year of operation. The HCCS Board of Trustees requests the Board's approval to enter into a loan agreement with TD BankNorth in order to secure $8.4 million of tax-exempt bond financing at an estimated rate of 5.13% for a period of 15 years, estimated to mature May 2023. Entering into this loan agreement will allow HCCS to refinance several high-interest loans and to significantly reduce interest and finance charges.

Innovation Academy Charter School

The Innovation Academy Charter School (IACS), currently located in Chelmsford, is a Commonwealth charter school in its twelfth year of operation. Last month, the Board approved the IACS Board of Trustees' request to become a regional charter school and relocate to Tyngsborough. This month, IACS requests the Board's approval to enter into a loan agreement for up to $7.5 million over a period of up to 30 years. The school is currently in conversation with multiple banks and has an offer from Century Bank.

The purpose of this financing is to purchase a state-of-the-art facility located at 72 Tyng Road in Tyngsborough from Boston University. The facility (80,000 sq. ft.) and surrounding land (200+ acres) will provide a permanent home for the school's entire grade span.

All parties to these loans have acknowledged in writing their understanding 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. They have also acknowledged in writing that specifically and without limitation, the Board's approval of the loan has no impact on any action that the Board may choose to take in the future with respect to probation, revocation, or renewal of the school's charter. The proposed motion approving this loan agreement request is explicitly conditioned upon the inclusion of this language in the loan agreements themselves. These written acknowledgements will be required of any new lenders should there be changes.

The Department has reviewed these requests, and they appear reasonable and consistent with the charter school statute and regulations. With the safeguards explained above and agreed to by the schools, I recommend that the Board approve these requests as presented.

If you have any questions regarding this amendment or wish to see the school's full request, please contact Mary Street, Director of Charter Schools, at 781-338-3200; Jeff Wulfson, Associate Commissioner, at 781-338-6500; or me.