The Massachusetts Board of Elementary and Secondary Education

Charter Schools — Approval of Loans beyond Charter Duration (Argosy Collegiate Charter School, Atlantis Charter School, Benjamin Franklin Classical Charter Public School, Boston Collegiate Charter School, Boston Preparatory Charter School, Boston Renaissance Charter Public School, Brooke Charter School, Community Charter School of Cambridge, Christa McAuliffe Regional Charter Public School, Foxborough Regional Charter School, Francis W. Parker Charter Essential School Pioneer Charter School of Science, Veritas Preparatory Charter School)

To:

Members of the Board of Elementary and Secondary Education

From:

Jeff Wulfson, Acting Commissioner

Date:

February 16, 2018

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 the Commissioner the authority to approve such loan requests. I am informing the Board of fourteen such approvals. This memorandum organizes the approvals chronologically.

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, as guarantor, that will not exceed $1,160,000. Eagle Bank provided the loan, with a term of up to 10 years, to the Friends of PCSS, the school's foundation. The loan will be used to purchase a building located at 466 Broadway Street in Everett for administrative offices.

In a letter dated December 23, 2016, the board of trustees of the Veritas Preparatory Charter School (Veritas) requested approval to enter into a loan agreement for $4,400,000. PeoplesBank provided the loan to the Friends of Veritas Preparatory Charter School, Inc., the school's foundation, with a term of 25 years, which was guaranteed by the school. The loan will be used to purchase property at 370 Pine Street in Springfield.

In a letter dated January 13, 2017, the board of trustees of Foxborough Regional Charter School (FRCS) requested approval to enter into a loan agreement for $10,000,000 for the purchase of property located at 33 Commercial Street in Foxborough. The Massachusetts Development Finance Authority (MDFA) issued a $10,000,000 tax-exempt revenue bond to the school, that was purchased by Eastern Bank with a term of up to 30 years. The loan was used to expand and reconstruct the school's property. In another letter on November 21, 2017, FRCS requested approval to enter into a loan agreement in connection with the refinancing of $26,600,000 of revenue bonds. The proceeds of the refunding bonds are to be invested in open market securities. This refunding could save FRCS over $6,000,000 over the life of the bonds.

In a letter dated January 25, 2017, the board of trustees of Francis W. Parker Charter Essential School (Parker) requested approval to enter into a loan agreement, as guarantor, for $2,752,00. The loan is to The Sizer Foundation, the school's foundation, from TD Bank in connection with tax exempt bonds with a repayment term of up to 10 years. The loan will be used to refinance Parker's school building located at 49 Antietam Street in Devens and to make needed capital repairs.

In a letter dated March 20, 2017, the board of trustees of Argosy Collegiate Charter School (Argosy) requested approval to enter into a loan agreement, as guarantor, that will not exceed $3,560,000. Bank Five will provide the loan to the Argosy Collegiate Charter School Foundation, with a term of up to 20 years, and MDFA will provide a credit enhancement guaranty of up to $935,000. The loan will be used to purchase of a building located at 263 Hamlet Street in Fall River.

In a letter dated March 24, 2017, the board of trustees of Boston Renaissance Charter Public School (BRCPS) requested approval to enter into loan agreements for $8,000,000. Century Bank will provide the loan with a term of up to 22 years. The loan will be used to refinance BRCPS current location at 1415 Hyde Park Avenue in Hyde Park. This loan will reduce BRCPS' current annual interest expense and free up funds in the operating budget for the direct benefit of the students.

In a letter dated May 18, 2017, the board of trustees of Atlantis Charter School (Atlantis) requested approval to enter into loan agreements, as guarantor, for $25,500,000. The Atlantis Educational Foundation (Foundation) acquired the loans funded by revenue bonds issued by MDFA of which $7,500,000 will be sold to BayCoast Bank with a 20-year term. Seventeen million dollars will be sold to Washington Trust Company of Westerly (Washington Trust) with a 20-year term and a mandatory purchase of the bonds by Atlantis and the Foundation after 10 years. Atlantis and the Foundation will also obtain a credit line of $500,000 from Washington Trust and receive a loan from Jobs for Fall River Inc. for $500,000 with a 10-year term. The loans will be used for construction of a building, other routine capital projects, and an athletic field at their property at 991 Jefferson Street, Fall River.

In a letter dated June 18, 2017, the board of trustees of Benjamin Franklin Classical Charter Public School (BFCCPS) requested approval to enter into loan agreements, as guarantor, for up to $26,500,000. I approved the loan. In a letter dated December 6, 2017, BFCCPS informed me of a change to the lender, therefore I issued a new approval. The loans will be to the Benjamin Franklin Educational Foundation Inc. MDFA will issue revenue bonds that will be sold to Citizens Bank with a maximum term of 30 years. There will be a $5,000,000 guaranty by the MDFA. The Property Casualty Initiative also approved $2,000,000 in subordinated debt. The loans will be used for the purchase of 10 acres of land at 431 Washington Street, Lots 2A and 3, in Franklin. The land will be used for the construction of a building and gymnasium, as well as outdoor space and walking trails.

In a letter dated June 18, 2017, the board of trustees of Brooke Charter School (Brooke) requested approval to enter into 3 loan agreements for up to $44,125,000. The first loan is for up to $27,000,000 for tax exempt bonds with a term of up to 30 years to be purchased by Boston Private Bank & Trust Company; the next loan, for up to $13,000,000 will have a term of up to 30 years to be provided by Boston Community Loan Fund; and the third loan is up to $4,125,000 of Qualified Zone Academy Bonds with a term of up to 35 years to be purchased by Brooke Foundation, Inc. The loans will be used to acquire property, construct a new facility, renovate existing campuses and to acquire furniture, fixtures, or equipment.

In a letter dated August 10, 2017, the board of trustees of Boston Preparatory Charter Schoo1 (BPCS) requested approval to enter into a loan agreement, as guarantor, for up to $12,000,000. The MDFA issued a $12,000,000 tax-exempt revenue bond to be purchased by Citizens Bank with the loan going to The Preparatory Foundation with a term of 10 years. The loan will be used to construct a new wing to be connected to the school's permanent facility located at 885 River Street in Hyde Park. The new wing will be used to house middle and high school students as BPCS expands to full capacity of 700 students.

In a letter dated November 10, 2017, the board of trustees of Boston Collegiate Charter School (BCCS) requested approval to enter into a loan agreement, as guarantor, for up to $7,200,000. MDFA will issue a $7,200,000 tax-exempt revenue bond to be purchased by Eastern Bank with the loan going to The Boston Collegiate Charter School Foundation with a term of 15 years. The loan will be used toward the expansion and renovation of the existing building located at 11 Mayhew Street in Boston. The expansion will include a cafetorium and an 11,200 square foot addition for classrooms.

In a letter dated November 17, 2017, the board of trustees of Community Charter School of Cambridge (CCSC) requested approval to enter into a loan agreement, as guarantor, for up to $21,200,000. MDFA will issue a $21,200,000 tax-exempt revenue bond to be purchased by Boston Private Bank with the loan going to the Community Charter School of Cambridge Foundation with a term of 20 years. The loan will be used to purchase the buildings the school is currently leasing at 245, 247R, and 255 Bent Street in Cambridge. This purchase will provide a total of 55,838 square foot of space and parking spaces for the school.

In a letter dated December 13, 2017, the board of trustees of Christa McAuliffe Regional Charter Public School (McAuliffe) requested approval to enter into a loan agreement, as guarantor, for up to $8,600,000. MDFA will issue a $8,600,000 tax-exempt revenue bond to be purchased by Middlesex Savings Bank (Bank) with the loan going to the Christa McAuliffe Charter School Foundation with a term of 20 years. The loan will be used to construct a new wing to be connected to the permanent facility located at 885 River Street in refinance and renovate their existing school building located at135-139 Newbury Street in Framingham. It will also be used to acquire and install furnishings and fixtures for the same. The school will also renew its existing line of credit with the Bank for $500,000 with the principal balance due on demand.

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 language that follows 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.

**************

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.