In July, IFF closed six loans totaling $6,315,721 for community-driven projects in the Midwest, in addition to three credit enhancements for charter schools. We’ve included below a roundup with information about several of the organizations that received the loans and what they’re doing with the capital, as well as how the credit enhancements will benefit each charter school network. To learn more about IFF’s lending, visit our Capital Solutions page.
Floating Museum received a $130,000 loan to purchase a 5,800-square-foot facility in Chicago’s Grand Crossing neighborhood on the city’s South Side. The facility will provide Floating Museum with a permanent space for rehearsals, studio space, offices, and storage. Additional funding for the acquisition was provided through a Field Foundation grant. Floating Museum is a non-profit arts organization that hosts live performances (e.g., poetry, performing arts) and leverages existing public assets such as parks and transit stations to bring art to life by creating free standing, temporary art exhibits and sculptures in neighborhoods on Chicago’s South and West Sides. The organization aims to counteract the relative scarcity of resources for supporting cultural production allocated to these communities, and nurtures deep engagement with constituencies to focus on mutually beneficial, sustainable partnerships between neighborhood spaces, municipal organizations, and large cultural institutions.
Lawrence County Independent Schools
IFF closed a $950,000 loan for Lawrence County Independent Schools (LCIS) that will enable the rehabilitation of an existing school building in Bedford, IN. The facility includes 14 classrooms; dedicated space for music, art, and STEAM programming; a gym and cafeteria; and office and administrative space. The 14,225-square-foot facility was closed in June 2020 after the public school district that previously owned it voted to consolidate its existing schools. The consolidation devastated the rural community, which banded together to establish a nonprofit and acquire the facility – along with two other closed school buildings – to operate a public charter school serving K-8 students. IFF’s loan will facilitate health and programmatic upgrades in the facility, kitchen enhancements, minor cosmetic projects, and the purchase of furniture, fixtures, and equipment.
Milwaukee Academy of Science
IFF closed a $3.5 million loan that will facilitate renovations to the Milwaukee Academy of Science (MAS), a K4-12 STEM charter school in Milwaukee, WI. The loan will also be used to finance the construction of an auxiliary gym adjacent to the school’s existing facility. The project will enable the high-performing charter school to serve an additional 255 middle and high school students, reducing a 400-student waiting list by increasing total enrollment capacity to 1,525 students.
Vanguard Community Development Corporation
IFF closed a $476,000 loan for Vanguard Community Development to refinance the balloon payment of a maturing loan from another lender that was used to finance renovations to a commercial building in Detroit, MI, that houses the North End Workforce Career Center. Vanguard is a nonprofit organization founded in 1994 to facilitate the revitalization of the physical, social, and economic fabric of Detroit’s historic North End neighborhood. IFF’s loan will prevent Vanguard from making a balloon payment that would have a detrimental impact on the organization’s financial performance, help the organization save $10,000 annually in debt service, and ensure that the workforce development program for reentering citizens housed in the facility – which served 368 people last year – continues uninterrupted.
Since 2005, IFF has been a grantee in the U.S. Department of Education’s Credit Enhancement program, which awards funding to organizations to enhance the credit of charter schools so they can access capital in the private sector. Credit enhancements are deployed most frequently for charter schools seeking capital from the bond market and commercial banks to drive down their interest rates and make it easier and more affordable for them to borrow capital.
The Great Recession froze the bond market in 2008, leaving large charter school operators without a much-needed source of capital. By 2011, these charter school operators were able to borrow high-interest capital when the bond market thawed. Now, a decade later, charter school operators who did so have an opportunity to refinance their debt during the redemption window and IFF is helping them do so with credit enhancements.
In July, we closed three large credit enhancement projects for Chicago Math and Science Academy, Acero Charter Schools, and LEARN. Read on to learn how the credit enhancements benefited each charter school operator.
Acero Charter Schools
Acero Charter Schools serve approximately 7,124 students at 15 schools in Chicago, IL. IFF pledged $3.4 million in U.S. Department of Education credit enhancements to Acero in 2011 (then operating as UNO Charter School Network). In July 2021, Acero refinanced its debt in the bond market and IFF pledged $560,000 in additional credit enhancements. Doing so reduced Acero’s interest rates significantly and will result in $15 million in savings for the charter school network in the next 20 years.
Chicago Math and Science Academy
Operated by New Plan Learning, Chicago Math and Science Academy serves 600 students in grades 6-12 in Chicago, IL. IFF provided a $1 million credit enhancement to the school in 2011, which enabled facility improvements. This summer, New Plan Learning refinanced its debt in the bond market and we modified the terms of the credit enhancement to lower the school’s interest rate on its debt, saving the school $7.47 million during the next 20 years.
Lawndale Educational and Regional Network Charter School (LEARN)
LEARN serves almost 4,000 students in a pre-K-8 network of 10 public charter schools in Chicago and Lake County, IL. In July 2021, IFF provided a $2.95 million credit enhancement to LEARN to provide a debt reserve fund for $31 million in Illinois Finance Authority revenue bonds. The credit enhancement will enable LEARN to refund and refinance existing taxable and tax-exempt debt used for the acquisition, construction and renovation of its Roman Butler, Hunter-Perkins and Herro campuses; improve these existing campuses; and build a new campus in Waukegan, IL.
Tags: : Capital Solutions, Loan Round-ups, Schools