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!