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Local Initiatives Support Corporation2014 Charter SchoolFacility Finance LandscapeSeptember 2014

2014 CHARTERSCHOOL FACILITYFINANCE LANDSCAPEWritten ByReena Abraham, Vice President, LISCSusan Gundersen, Research Fellow, LISCWendy Berry, Managing Director, Charter School AdvisorsClara Chae, Senior Program Officer, LISCElise Balboni, Senior Vice President, LISCSeptember 2014Published ByThe Educational Facilities Financing Center ofLocal Initiatives Support ducationThis publication and related resources are available atwww.lisc.org/effc/2014LandscapeCover Photo: Students at Hiawatha Academies, a network of highperforming public charter schools in Minneapolis, MinnesotaPublication Design: Dinsmore Designs

LOCAL INITIATIVES SUPPORT CORPORATIONLocal Initiatives Support Corporation (LISC) is dedicated to helpingcommunity residents transform distressed neighborhoods into healthy andsustainable communities of choice and opportunity—good places to work,do business and raise children. LISC mobilizes corporate, government andphilanthropic support to provide local community-based organizations with: loans, grants and equity investments local, statewide and national policy support technical and management assistanceLISC is a national organization with a community focus. Our program staffare based in every city and many of the rural areas where LISC-supportedcommunity development takes shape. In collaboration with local communitygroups, LISC staff help identify priorities and challenges, delivering themost appropriate support to meet local needs.LISC is Building Sustainable Communities by achieving five goals: Expanding Investment in Housing and Other Real Estate Increasing Family Income and Wealth Stimulating Economic Development Improving Access to Quality Education Supporting Healthy Environments and LifestylesSince 1980, LISC has marshaled 13.8 billion from over 3,000 investors,lenders and donors. In urban and rural communities nationwide, LISC hashelped to finance the construction or rehabilitation of 313,400 affordablehomes and 51 million square feet of retail, community and educationalspace—totaling 41.2 billion in development.For more information about LISC, visit www.lisc.org.EDUCATIONAL FACILITIES FINANCINGCENTERThe Educational Facilities Financing Center (EFFC) at LISC supportshigh-quality public charter schools in distressed neighborhoods. LISCfounded the EFFC in 2003 to intensify its national effort in educationalfacilities financing. The EFFC pools low-interest loan and grant funds andleverages them for investment in charter school facilities in order to createnew or renovated school facilities for underserved children, families andneighborhoods nationally. Since making its first charter school grant in1997, LISC has provided 141 million in grants, loans or guarantees for 171schools across the country. The EFFC is supported by the Bill & MelindaGates Foundation, the JPMorgan Chase Foundation, the U.S. Department ofEducation and the Walton Family Foundation.The EFFC assembled a National Advisory Board to provide oversight andleadership of its strategic mission, resource development, public policyactivity and other issues relevant to the attainment of its mission. TheAdvisory Board is comprised of members representing the communitydevelopment, education, finance and philanthropic communities.EFFC ADVISORY BOARDJIM GRIFFIN (Chairman)PresidentMomentum Strategy & ResearchBETH BRAY (ex-officio)Program OfficerWalton Family FoundationJOHN KINGHORNDirector, Social InvestmentsPrudential Financial, Inc.GINA MAHONEYSenior Vice President, Government RelationsNational Alliance for Public Charter SchoolsCARMEN MALDONADORegional Director, NortheastTurner-Agassi Charter School Investment FundSAMIR K. PATELManaging Member3PS Capital, LLCMICHAEL RUBINGERPresident & Chief Executive OfficerLocal Initiatives Support CorporationSTEVE SMALLChief Financial OfficerTEAM Charter SchoolsWILLIAM TAFTVice President & Executive DirectorLISC Indianapolis

ACKNOWLEDGEMENTSWe want to acknowledge the many people who contributed directly orindirectly to this study. Over 250 individuals generously gave their time toprovide us with data and information during the course of our research,patiently answering follow-up questions and referring us to other individualsknowledgeable in the area we were exploring.We would like to extend special thanks to the Walton Family Foundation for itssupport for this research, but acknowledge that the findings and conclusionspresented in this report are those of the authors alone and do not necessarilyreflect the opinions of the foundation or the individuals acknowledged below.We would also like to thank our LISC colleagues, Diana Baide, Ben Carson,Arkady Ho, Sara Sorbello and Charmian Stewart, for their significant editingand research contributions.We would like to express our gratitude to the following individuals for theircomments and contributions to the 2014 Landscape.PRIVATE NONPROFIT ORGANIZATIONSNoah Wepman and Julie Frye, Bill & Melinda Gates Foundation; Doug Elliottand Debbie Pierce, Daniels Fund; Beth Bray, Walton Family Foundation;Mike Nilles and Michelle Volpe, Boston Community Capital; Tom Porterand Mark Medema, Building Hope; Scott Sporte and Anne Geggie, CapitalImpact Partners; Rich Billings and Julie Maier, Charter School Growth Fund;Michelle Liberati, Charter Schools Development Corporation; Kristy Ollendorfand Sabrina Sharif, Clearinghouse CDFI; Colleen Schwarz, CommunityReinvestment Fund, USA; Noni Ramos, Enterprise Community Partners, Inc.;Anita Landecker and Louise Manuel, ExED; Tom DeSimone, Genesis LA; ScotSlay and Mary Elizabeth Evans, Hope Enterprise Corporation; Becky Regan,Housing Partnership Network; Andrea Poole, IFF; Don Liberati, InnovativeSchools Development Corporation; Alex Shawe, KIPP Foundation; KimLatimer-Nelligan,Wanda Chin and Leslie Swift Bernal, Low Income InvestmentFund; Joe Palazzolo, New Jersey Community Capital; Norah McVeigh and AnneDyjak, Nonprofit Finance Fund; Kate Barr and Phil Hatlie, Nonprofits AssistanceFund; Angela Stephenson, Raza Development Fund, Inc.; Jane Ellis, Self-Help;Sara Vernon Sterman and Molly Melloh, The Reinvestment Fund, Inc.; TonyMaruca, Build with Purpose; Laura Hsu and Dave Umansky, Civic Builders; andScott Thomas, Pacific Charter School Development.TAX-EXEMPT BOND MARKETEugene Clark-Herrera and Alison Radecki, Orrick, Herrington, & Sutcliffe LLP;Rich Harmon, BB&T Bank; and Jeff Cohen, Jeffries.FEDERAL INITIATIVESKristin Lundholm, U.S. Department of Education; Matt Josephs and NicoleBarcliff, Local Initiatives Support Corporation; Dwight Berg, Public Economics;Buzz Roberts and Edith Brashares, U.S. Department of Treasury; DianeFlynn and Kathy Olsen, two9three Consulting; John Buck, Buck FinancialAdvisors; Derek Jones, U.S. Department of Agriculture; Paul Anderson, RapozaAssociates; and the numerous allocatees that provided information regardingtheir New Markets Tax Credit utilization for charter schools, including: MichaelJohnson and Jonathan Goldstein, Advantage Capital Community DevelopmentFund, LLC; Tonja Adams and Michelle Militello, Bank of America Merrill Lynch;Blondel Pinnock and Jennifer Mark, Carver Federal Savings Bank; WilliamDana Jr., Central Bank of Kansas City; Jonathon Konow, JP Morgan Chase &Co.; Tony Smith, SB Friedman Development Advisors; Gina Nisbeth, Citigroup,Inc.; Kahlil Gross, City First Bank of D.C.; Craig Stanley and James Badgley,CBO Financial, Inc.; Adam Weers, Trammell Crow Company; Divya Sashti,TruFund Financial Services, Inc.; Elaine DiPietro, Enterprise CommunityPartners, Inc.; Bruce Bryant, Fifth Third CDC; Tom Edmiston and Peter Giles,Great Lakes Capital Fund; Donna Ducharme, Great Lakes Region SustainabilityFunds, LLC; Karl Malloy, Harbor Bankshares Corporation; Richard Campbell,Hope Enterprise Corporation; Christie Gillespie, United Way of Central Indiana;Robert Poznanski, Local Initiatives Support Corporation; Ruben Alonso III,KCMO CDE; Naomi Baruch, Massachusetts Development Finance Agency;Laurel Tinsley, MBS Urban Initiatives CDE, LLC; Michael Taylor, David Gibsonand Marcia B. Lynch, PNC Financial Services Group; Miljana Vujosevic,Prudential Financial, Inc.; Eric Klipfer, RBC Capital Markets; Avi Kollenscher,Related Companies; David Leve, Renaissance Finance CDE, LLC; Charles Perry,Perry Rose, LLC; Melissa Nerone, Jonathan Rose Companies; Bill Seddon,St. Louis Economic Development Partnership; Christopher Sears, SunTrustCommunity Capital, LLC; Brandon Wellford, TMA Development Corporation;Nicole Blumner and David Kilper, U.S. Bancorp Community DevelopmentCorporation; Ursula Eatmon, Wells Fargo Community Lending & Investment;Farshad Maltes, Wisconsin Housing and Economic Development Authority; andDavid Shafer and Lyna Wang, WNC National Community Development Advisors,LLC.STATE INITIATIVESDeven Mitchell, Alaska Department of Revenue; Marian Svobodny and PaulPrussing, Alaska Department of Education & Early Development; AidenFleming, Arizona Department of Education; Michael Santellanas, IndustrialDevelopment Authority of the City of Phoenix; Vernon L. Robertson and CindyHollowell, Arkansas Department of Education; Judy Brummett, ArkansasDevelopment Finance Authority; Murray Britton, Arkansas Division of PublicSchool Academic Facilities and Transportation; Kathy Smith, Walton FamilyFoundation; Katrina Johantgen and David Weinberg, California School FinanceAuthority; Jason Casillas, California Office of Public School Construction;Ricardo Soto, California Charter Schools Association; John Stoecker,California Municipal Finance Authority; James Hamill, California StatewideCommunities Development Authority; John Sun, Pacific Charter SchoolDevelopment; Marisela Cervantes and Monique Epps, Los Angeles UnifiedSchool District; Shannon Farrell-Hart, California Department of Education;Scott Newell, Colorado Department of Education; Jessica Johnson, ColoradoLeague of Charter Schools; Walker Stapleton and Clare Jozwiak, ColoradoDepartment of the Treasury; Jo Ann Soker, Colorado Educational andCultural Facilities Authority; Michael Morris and David Wasch, ConnecticutHealth and Educational Facilities Authority; Kevin Chambers and Robert