Buck Financial Blog

In September 2020, IPS Enterprises, Inc.  (IPS) closed its second loan geared towards funding IDEA Public School’s (IDEA) expansion into Florida. IDEA’s mission is to graduate more students to and through college, and to create proof points to show what is possible for low-income students.  By doing so, the larger hope is that this competition will improve the traditional public school systems where IDEA operates.  As part of this mission, IDEA is expanding into states other than Texas via IPS, which conducts IDEA’s non-charter activities.  IDEA first expanded into Louisiana, with the opening of two Baton Rouge campuses in the fall of 2018.  Florida is next in line, and the first phase of the Florida expansion is focusing on Tampa, with a second phase to target Jacksonville for openings in 2022.  With this financing, IPS has continued IDEA’s expansion into Florida that began in late 2019 with the first Tampa financing at Fowler and Nebraska.

This financing consisted of two loans, a senior loan of for a maximum of $18,750,000, and a subordinate loan totaling $7,969,500 (described below).  These acquisition and construction loans funded the land acquisition and will fund the construction of a campus to be leased by IDEA Public Schools Florida, one of several related entities created as part of IDEA’s non-Texas expansion.  This yet-to-be-named school will open in Fall 2021 at a location on 10th Avenue in Tampa, and the campus will eventually serve grades K-12.

This campus, and other IDEA Florida campuses, will be part of the newly-created Schools of Hope Program in Florida, stemming from an education reform law passed in 2017 by the Florida Legislature.  Schools of Hope will give students stuck in chronically failing schools an opportunity to attend a school that will prepare them for college, career and life. The nation’s highest performing charter school networks, with proven track records of serving low-income communities, can apply to Florida State Board of Education to be designated as a Hope Operator.  Only a few nationally recognized charter school networks have been approved as Florida Hope Operators, including IDEA Public Schools.

The Schools of Hope law provides an expedited process for establishing schools as well as additional regulatory flexibility and autonomy, while still holding the schools accountable for results.  As part of this program, the Legislature has already appropriated more than $265 million to support Hope Operators, including $40 million in recurring funds.

Additionally, the subordinate debt on this project was made under a program that is also funded by the State of Florida and is part of the overall Schools of Hope effort, coinciding with the operational funding under the program.  The subordinate debt is being managed by Building Hope Finance on behalf of the Florida Department of Education.  This was the initial subordinate loan made, and IDEA’s expansion already calls for several more loans to be made under this program.

Buck Financial Advisors served as financial advisor to IPS on this transaction.  PNC Bank was senior lender on this project.  Hunton Andrews Kurth served as counsel to IPS.  Orrick Herrington and Sutcliffe served as counsel to PNC, and Kutak Rock served as counsel to Building Hope Finance.  Congratulations to IPS, IDEA, and, more importantly, to the future students and families of Tampa!

But you wouldn’t know that from reading the Democratic Party platform.

Yet another study, for which a link to an article about is included below, shows that charter schools do better than unionized schools, and in particular they do better educating African American children.  As other studies have shown, a college education is worth up to $1.4 million more in lifetime earnings.

Yet the Democratic Party continues to do the teachers’ union bidding by throwing up roadblocks to charter schools, all the while touting their low-income bona fides by talking up a $15 minimum wage.  Charter School students make up 6% of public school students, up from 2% a while ago, which is why the unions have become more aggressive – charters are hitting their pocketbooks.  (As most readers know, charter schools typically are not unionized.)  As anyone who has read my posts knows, public sector unions like the teachers union and police union perpetuate a conflict of interest by making political contributions to candidates, and then negotiating a collective bargaining agreement with those elected.  Its no coincidence that these unions are strongest in geographies where the Democratic Party is strongest.

Joe Biden’s educational plan is outlined in a video at the bottom of the article whose link is shown below.  It’s scary to think of its potential consequence for charter schools and the minority students they are serving so well.   I urge folks to read the article and the study, and to watch the video.  For a party that purports to be on the side of the little guy, the Dems sure are hiding it well.  For the record, I am an Independent who believes we need political reform in the worst way – that neither of these parties are serving the public’s interest.  But, working in the education field, the worst hypocrisy that I see comes from the Democratic Party because of the contradiction between their narrative of supporting low income and minority communities versus the reasons for their stance on public educational choice.

You often hear a debate about whether Black Lives Matter or All Lives Matter.  My take is: All Black Lives Matter!  The trauma against the African American community perpetuated by generational poverty resulting, in part, from lack of educational alternatives is more pervasive than almost any other source of violence.  After more than 20 years of progress in the charter school movement, these students cannot afford to take step backwards because of dislike of the current Administration (which is easy to have).  The party needs to hear that African Americans, Biden supporters, never-Trumpers, and all support choice when it comes to education. Because its working, and all Black lives should matter.

https://www.wsj.com/articles/the-charter-school-advantage-11599606404?mod=opinion_lead_pos6