New charter school operators are interested in finding a facility that will house their school in its initial years. The search for that facility should begin at the same time the school’s founders begin to fill out their charter school application, roughly twelve months prior to opening.
Estimating the number of students who will be enrolled in the first, second, and third years of operation is vital. It is important to plan for expansion after the school’s initial year. More than two-thirds (70 percent) of all charter schools are over-enrolled from the day they open.
Expansion space can be secured upfront, or school officials can obtain an option from the landlord to expand according to the school’s projected growth.
The basic formula for estimating the size of the needed facility is:
Number of students x 90 = Gross square footage required
This gross square footage will include space for your classrooms, administrative area, assembly, media, and cafeteria/food service.
Charter school officials seeking a location for their facility are the consumers of a product, and they should act like consumers, comparing different products to find the best deal. Three potential sites is really the minimum for a good comparison.
The best possible situation would be to lease existing school space. Private and public schools that may have closed or are currently not operating profitably are good prospects. Obtaining an existing facility already built-out for educational purposes will save a substantial amount of time and money.
Alternatively, recently shuttered supermarkets, variety stores, or drug stores make good conversions to schools. In most cases, the initial rent for such facilities will be under $5.00 per square foot; in some cases, the previous tenant may still be paying rent. This can be a plus for a new charter school: The existing landlord or the previous tenant will have an interest in having the space in use, operating and creating a revenue stream. Community development incentive programs may provide the landlord with a tax advantage for leasing and investing in a school. And in most states, facilities used for public education do not pay real estate taxes.
Charter school officials are urged to take advantage of the experience and market knowledge offered by a local commercial real estate agent. Agents are well-informed on what space is available in the marketplace . . . and, best of all, it is the landlord who pays the agent.
In rural areas, there may be little commercial space available for a school facility. Charter school officials will have to be creative in their search for an existing structure large enough to house the projected enrollment. And even if warehouse or industrial space is available, local zoning ordinances may not permits its use as a school. It makes sense to check with the local planning and zoning department before beginning a facilities search.
Special attention also should be given to determine the property’s previous uses. In most cases, an environmental study should be conducted to ensure the property has not housed environmentally sensitive operations or materials that would make it unfit for educational use.
Although charter schools cannot have a religious affiliation, that does not prevent a church from acting as landlord for a charter school. Many churches have Sunday school space that can be leased to a charter school during the week. Alternatively, they may own property that could be converted to charter school use by locating leased modular units on the property.
In a nutshell, charter school officials need to be creative when searching for an appropriate facility for their school, and they shouldn’t hesitate to use the services of a local real estate professional.
Mark Howard has specialized in the development of commercial properties since 1980. He owns and operates M.H. Realty Associates, Inc. in Tamarac, Florida. Readers with questions on facilities and finances are encouraged to contact him directly at [email protected]. The most frequent questions about common problems will be included in future columns.