Colorado Springs Early Colleges, a charter high school system led by City Council President Keith King, partnered with a national nonprofit earlier this month to purchase the Springs Business Park for $6.7 million.
“This will enable us to serve more kids here in Colorado Springs,” said King, administrator of Early Colleges. “By us buying this building, we stabilized the most difficult cost associated with the operations of the charter school.”
The Charter Schools Development Corp. purchased the property at 4405-4451 N. Chestnut St. in partnership with Early Colleges, which has been renting a portion of the office park since the school’s inception in 2007. King said the charter system plans to assume complete ownership of the 123,500-square-foot, 15-acre property by the end of 2014.
“It’s kind of a unique financing arrangement,” King said about the lease/purchase deal. “We had tried to purchase the building before, using more traditional means, but it was just difficult because we had a hard time finding 25 percent equity in the building. So we partnered with the Charter Schools Development Corporation.”
The facilities were purchased from Springs Business Park Partners, a California-based group that owned the three-building complex for more than 20 years, according to brokerage company Colorado Springs Commercial.
Early Colleges has maintained a cordial relationship with fellow tenant Colorado Technical University, which is primarily an evening campus and previously allowed the charter school to use certain teaching spaces during daytime hours. CTU now occupies 85,000 square feet of the park, according to Springs Commercial.
“They have been a great tenant and this had been a great partnership,” King said. “We are thinking about re-establishing our partnership with CTU and using some of those classrooms during the day again.”
CTU recently extended its lease another seven years, so the purchase of the property should change nothing for the technical school, King said.
Early Colleges plans to immediately renovate a currently vacant 18,000-square-foot space that once housed Electronic Data Systems, now on Garden of the Gods Road. The rehab will double both the school’s size and number of classrooms (from 16 to 32) and will cost an estimated $400,000 to $500,000. King said the project should be complete this summer.
Early Colleges currently offers 120 associate degrees as well as concurrent enrollment opportunities to work toward higher degrees via PPCC and CTU, according to King. He said one of the school’s goals is eventually to restore the number of students taking advantage of those programs — once 70, there are now only 20 or 30 such students.
Altogether, the system is expected to educate nearly 1,500 students this fall: 600-700 in Colorado Springs, around 400 in Fort Collins and more than 300 in Douglas County.
The real estate transaction was completely funded by three financial institutions — Great Western Bank, Mile High Community Loan Fund and Partners for the Common Good — via the school’s partnership with CSDC, according to broker Mike Helwege.
After the property is handed over to Early Colleges, King said the school will “have a master lease for the entire property and CTU will lease from us. Then we will take that cash flow in order to keep expenditures down.” Beyond that, King said he then hopes to attain a traditional mortgage on the new space.
“We want to flip these into the regular loans by the end of the year,” King said. “The concept is to try to find enough equity in the buildings, with our leases, that we have enough to do just a traditional 25-year loan.”
He said the school plans to acquire a lending package that will also include the schools in Fort Collins and an upcoming location in Parker, which will also be part of a lease/purchase agreement.
King explained that the two primary costs concerned with a charter system like Early Colleges are operations and facilities, which alone can account for 15 to 20 percent of its budget. He said that by purchasing the property and leasing space to CTU, Early Colleges will be able to keep that rate at around 5 percent and contribute more to the student tuition.
This is what the Charter Schools Development Corp. specializes in, specifically.
CSDC, a nonprofit Community Development Financial Institution, has provided/procured around $680 million in capital financing and facilities for 235 charter schools in 24 states and D.C., according to its website. Those schools include several in Colorado Springs and across the state: Highline Academy in South Denver, Pikes Peak Prep and Atlas Prep in Colorado Springs, KIPP Sunshine Peak Academy in Denver, Carbon Valley Academy in Frederick, New Vision Charter School in Loveland, Ricardo Flores Magon Academy in Westminster, Early College High School at Arvada in Arvada, Caprock Academy in Grand Junction, Aurora Expeditionary Learning Academy in Aurora, Sims Fayola International Academy in Denver, Global Village Academy-Northglenn in Northglenn, Two Roads Charter School in Arvada and Challenge to Excellence in Parker.
Early Colleges is also having a big year to the north, with plans to open a new school in Douglas County for the fall semester. The school in Parker will be operated similar to Colorado Springs Early Colleges, according to King. He added that the school expects to host more than 300 students when it opens in Parker.
King said Early Colleges has made an offer on the 24,000-square-foot Parker Headquarters Building at 10235 Parkglenn Way, listed for $3.95 million by Trevey Land and Commercial Property. The Douglas County school is now located in a shopping center in Castle Rock — a temporary one-year lease until the purchase of that property or another is finalized.
King said the Douglas County school “has tried to find a space to lease with the option to buy. The Douglas County area has made this a very difficult proposition. That is why we are submitting this offer to buy the building. The facility leased will be determined on the projected enrollment for the first two or three years of operation. It is our belief that this building offers us the best opportunity to serve the students of Douglas County.”