Step into the world of Classical Charter Schools and witness the strategic steps we took to shape our students’ futures. In this blog post, we detail the process of transitioning from leasing buildings to owning them, and the financial impact it holds. Every choice we make is geared towards providing our students with the best environment to flourish.
Classical Charter Schools, with its network of four buildings, two of which are co-located in public schools and two privately leased, reached a pivotal moment: it was time to own our premises. The choice was made after an in-depth analysis comparing the costs of our private lease rents with other similar school expenses. This financial preparedness was largely due to our supporters and donors over the years.
Our partner and building owner, Civicbuilders, offered us the option to purchase the building, located at 757 Concourse Village West in the Bronx. Upon carefully assessing the costs associated with such a transaction, it became clear that in the long term, we could be more financially efficient by purchasing the building outright. The primary factor in our decision was the projected savings, which are estimated to be over $400,000 per year.
Transaction Background
Our intent to purchase the building led us to hire a financial consultant, First Tryon, to assess our financial health and advise us on the best structure to acquire the necessary funding. They presented us with two options: apply for a bank loan or opt for bond financing. We ultimately chose bond financing, believing it to be in our best financial interest.
Our financial consultants provided a list of underwriters for us to interview. After an extensive selection process, which involved presentations from five potential underwriters, we chose Baird. They were conservative, meticulous, and committed to taking us to the finish line. They left no stone unturned in their quest to secure us a high rating from agencies like S&P and Moody’s, which was crucial to secure the best interest rates for our bond.
The process was exhaustive and required the full commitment of all team members. We overcame many hurdles, including securing an investment-grade rating, which was a significant milestone in our bond issuance process.
The day of the bond auction pulsed with an almost electric intensity. It was an adrenaline-charged whirlwind, each moment loaded with anticipation and the underlying hum of competition. It took a little over an hour to complete the auction. Shortly thereafter we closed the deal. The paperwork was extensive, and the weight of responsibility was significant, but knowing that we were doing this for our students made it all worth it.
The day of the bond auction pulsed with an almost electric intensity. It was an adrenaline-charged whirlwind, each moment loaded with anticipation and the underlying hum of competition. It took a little over an hour to complete the auction. Shortly thereafter we closed the deal. The paperwork was extensive, and the weight of responsibility was significant, but knowing that we were doing this for our students made it all worth it.
The process took a year, but the money saved was money earned for our students’ future. Despite the hurdles, including fluctuations in interest rates and the need for extensive documentation, the process was a success.
Our ability to secure an investment-grade rating was a testament to our strong financial health. We had no debt, a solid payment history, and a healthy cash reserve thanks to grants and prudent financial management. This strong financial position allowed us to avoid a “living paycheck to paycheck” scenario, and to make necessary spending adjustments when needed.
![](https://classicalcharterschools.org/wp-content/uploads/2023/07/Cassa.png")
This post was contributed by Dr. Cassaberry-Furby, our Director of Business. As a non-CMO charter network, we rely on the thoughts, opinions, and innovations of our staff to move our mission forward and provide an excellent academic option to families in the South Bronx. To hear more from our staff, check out the next post! Or, click here to learn more.
