NCEF Resource List: Lease and Lease Purchase Financing for School Facilities
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LEASE AND LEASE PURCHASE FINANCING FOR SCHOOL FACILITIES

Information on financing educational facilities using leasing programs, lease purchase agreements, lease purchase revenue bonds and construction/leasebacks.


References to Books and Other Media

Alternatives to Construction [Portland Public Schools] Adobe PDF
(Long Range Plan, Portland Public Schools. Issue Paper 5.2, Mar 20, 2012)
This white paper explores program changes, the use of modular classrooms, leasing, and public/private partnerships as alternatives to new construction and major renovation of Portland, Oregon's public schools 5p

School Districts: Leases and Agreements. Adobe PDF
(California State Legislature, Sacramento , Aug 27, 2009)
This California legislation authorizes a school district to enter into leases and agreements relating to real property and buildings to be used jointly by the district and a local governmental agency. Existing law already authorized a school district to enter into leases and agreements relating to real property and buildings to be used jointly by the district and any private person, firm, or corporation. 8p.

Charter School Facilities Requirements: A Guide for Developers, Brokers and Landlords Adobe PDF
(Low Income Investment Fund, Nov 2007)
Guide to charter school fundamentals, economics and facilities requirements, as well as to the key issues and considerations regarding leases. Since the vast majority of charter schools are housed in leased facilities, this report is geared toward real estate developers, brokers and landlords who may be unfamiliar with charter schools. 16p.

Alternative Development Strategies for Public Schools: The Financial Implications of Installment Purchase Contracts and Construct-Leaseback Transactions. Adobe PDF
Ott, Steven; Read, Dustin
(Piedmont Public Policy Institute, Charlotte, NC , Aug 2006)
Provides guidance for North Carolina communities considering installment purchase financing and construct-leaseback transactions to build schools. The study involved reviews of existing literature, interviews with professionals familiar with alternative development strategies, and the construction of a financial model comparing hypothetical lease purchase and construct-leaseback scenarios. 45p.

Public-Private Partnerships for Schools. North Carolina Senate Bill 2009.
(North Carolina General Assembly, Jul 2006)
This bill authorizes North Carolina's local boards of education to enter into capital leases of real or personal property for use as school facilities. A capital lease entered into under this section may provide that the private developer is responsible for providing, or contracting for, construction, repair, or renovation work. The bill was signed into law on July 19, 2006.

The Public-Private Educational Facilities and Infrastructure Act of 2002. Procedures. [Virginia]
(Commonwealth of Virginia, Richmond , May 2006)
Provides guidance for submission and completion of projects under Virginia's Public-Private Educationl Facilities and Infrastructure Act.The intent of this statute is to provide a vehicle for Virginia's state and local agencies to create public-private partnerships to meet a wide range of infrastructure needs, including such as construction and renovation of elementary and secondary schools, as well as higher education facilities. The Virginia Act is structured to reduce the time and money spent by the submission of projects to extended boards of review, encourage entrepreneurial activity on the part of the private sector, tailor a project to the particular needs of the user, and encourage the innovative use of tax-exempt and taxable project financing. 31p.

A Review of School Facilities Programs and Analysis of School Facility Needs.
Johnson, Judith
(Maine State Dept. of Education, Augusta , Mar 2006)
Provides descriptive information on each of the four central components of Maine's school facilities program: major capital school construction, school revolving renovation program, leased space program, and facilities maintenance and capital asset management program. Each program description is accompanied by historical data reflecting funding and work priorities. 37p.

The Basics: Public Private Partnership Information.
(Triangle Community Coalition, Raleigh, NC , Feb 14, 2006)
Describes seven types of public/private partnerships used for school construction, provides examples of where they have been implemented, and lists pros and cons of these partnerships. Includes nine references. 7p.

Financing Energy-Efficient Projects.
(Schoolfacilities.com, Orange, CA , 2006)
Briefly describes tax-exempt lease/purchase agreements as a means to finance improvements in school facility energy consumption. 1p.

[Missouri School Facility Lease Purchase Policy] from Missouri Revised Statutes, Chapter 166, Permanent Funds and Trusts, Section 166.300
Aug 25, 2005
This provides definitions, describes how the Missouri school building revolving fund will be created; eligibility for lease purchases for projects; ranking of projects; when a plan may be waived; when repayment is required; failure to make annual payments; state to take possession of buildings; and procedures.

Thinking & Building Outside the Box. School Facilities Construction and Renovation Support for Public-Private Partnerships. Adobe PDF
(Triangle Community Coalition, Raleigh, NC, May 2005)
Position paper in support of public-private partnerships, outlining recommendations, background, trends, advantages, and case studies. Discusses municipal/capital leases and operating leases. 4p.

Act Concerning the Use of Public-Private Partnerships by School Districts [Arkansas] Adobe PDF
(State of Arkansas Senate Bill 858 , Mar 2005)
Defines "public-public partnership" as a contractual agreement between a school district and another governmental agency, political subdivision, or institution of higher education to meet a clearly defined need for facilities, infrastructure, or goods and services. Authorizes any school district to use public-public partnerships as a project delivery method for the building, altering, repairing, improving, maintaining, or demolishing of any structure, or any improvement to real property owned by the school district. 2p.

Case Study. Browning School and Silver Spring Neighborhood Center. [Milwaukee, Wisconsin]
(Milwaukee Public Schools, WI, 2005)
This unique project brought together three partners – a school, a nonprofit community agency, and a city housing authority. Located on land within West Lawn housing complex owned by the U.S. Department of Housing and Urban Development, Browning School and Silver Spring Neighborhood Center share a facility. Sections of the building are owned and operated by Milwaukee Public Schools, while other areas are leased by the City of Milwaukee Housing Authority to Silver Spring Neighborhood Center.

Debunking the Real Estate Risk of Charter Schools. Adobe PDF
(Ewing Marion Kauffman Foundation, Kansas City, MO , 2005)
Presents research that addresses the wariness that lenders and landlords often have concerning charter schools as clients. One commonly cited survey appears to show that nearly one in ten charter schools has "closed." However, the schools thus counted include many that just changed organizational structure, and continued to occupy and pay on their buildings. Even when buildings are prematurely vacated, 95% are able to be leased or sold on terms no less favorable to the lender or landlord. Charter schools started in conjunction with Education Management Organizations (EMOs) were found to have almost negligible failure rates. Also, charter schools with more students are less risky than average, as are those started one year or more after the home state passes a charter law. Finally, and ironically, the inability to find adequate buildings is itself a key contributor to charter school failures. 10p.

Urban Innovation: Cypress Hills Community School, Brooklyn, NY Adobe PDF
Adkins, Ray; Jaya-Vega, Maria; Winston, Perry
(UIA Congress, 2005)
Describes a community ownership non-profit lease model for purchasing and renovating an existing building for a 400-student school. This paper by the project manager, parent co-director, and architect illustrates the collaborative approach to community development, and suggests lessons for community facilities in other settings. It describes organizing the school, searching for a site and funding, transforming the building, and lessons learned. 8p.

Lease Purchase Financing: The Processes and Impact on New School Construction in Texas. Adobe PDF
Mohundro, William Randolph
(University of North Texas, 2005)
The purpose of this study was to review and explore the concept of lease purchase financing for the construction of new facilities in Texas. It sought to determine the impact of lease purchase financing and the characteristics of those districts that have utilized lease purchase financing for the purpose of new school construction. A two pronged approach was used for the study, both quantitative and qualitative. The study examined all school districts that utilized lease purchasing and examined various traits of the districts. Data was acquired from the Texas Education Agency and the Texas Bond Review Board. The qualitative portion of the study included interviews with superintendents of nine different Texas school districts that have utilized lease purchase financing. The study concluded that lease purchase districts were generally small school districts that were property poor and have high property tax rates. The study also concluded that the major reason for districts to use lease purchase financing was to avoid having to hold an election in order to gain approval for the sale of traditional general obligation bonds. Another factor identified was the availability of state funds through the state Instructional Facility Allotment. The study also concluded that while districts sought to provide better programs for their students through better facilities, that students actually suffer due to instructional funds being used for the payment of long term debt. [Author's abstract] 129p.

Facilities Financing. New Models for Districts That Are Creating Schools Now.
Hassel, Bryan; Esser, Katie Walter
(Education Evolving: A Joint Venture of the Center for Policy Studies and Hamline University, St. Paul, Minnesota , Feb 2004)
This report outlines innovative ways school districts are meeting their facilities needs outside the traditional sources of facilities financing. Non-traditional funding strategies include private development of public school buildings, partnerships with employer-based schools, direct borrowing on the private market, and sale or lease of existing school facilities. Cost-saving solutions include space-sharing with community agencies or with higher education, and educating outside the school building using community resources or distance learning. New institutional solutions include establishing real estate trusts and intermediaries. Included are specific examples of how districts are implementing these strategies, and a list of additional readings on these topics. 16p.

Maryland Public Education Facilities Act. Senate Bill 736 Adobe PDF
(Department of Legislative Services, Maryland General Assembly, 2004)
"This bill establishes the Maryland Public Education Facilities Act to: 1) encourage the use of alternative financing mechanisms, private capital, and other funding sources for the construction and improvement of public school facilities; 2) accelerate and improve the financing for qualified education facilities; and 3) provide public and private entities with the greatest possible flexibility in contracting with others." Includes descriptions of the provisions concerning issuance of tax-exempt municipal bonds, procurement methods, use of surplus land, and model procedures and recommendations. 6p.

Overview of Alternative Funding. Adobe PDF
Lever, David
(Maryland General Assembly, Annapolis , Oct 02, 2003)
Presents an outline of alternative school funding, including a description, pros, and cons for each. The methods described are impact fees, excise taxes, sales taxes, proffers, grants and donations, lease/purchase arrangements, performance-based contracting, public-private partnership, commercial development schools. Also included are descriptions, pros, and cons of the five project delivery methods: Construction Management, Construction Management At-risk, Design-Build, Job-Order Contracting, and Finance-Design-Build. 10p.

Lease–Leaseback Construction Delivery Method for School Districts. Adobe PDF
Chialtas, Andreas C.
(Coalition for Adequate School Housing, Sacramento, CA , May 2003)
This is based upon California's Education Code Section 17250.10-17250.50 and Education Code Section 17406 and describes the lease-leaseback design build approach. Covered are site lease, facilities leases, construction provisions, guaranteed maximum sum, bonding insurance, and dispute resolution. 11p.

School Construction: Building a Better Schoolhouse. Adobe PDF
(Evergreen Freedom Foundation, Olympia, WA., 2003)
This discusses several innovative ways to fund school construction using public-private partnerships, including municipal/capital lease plans, operating lease plans, a service contract structure, and a satellite concept. This is section of the "School Director's Handbook" which addresses a range of issues of interest to school directors, teachers, and parents and are intended to promote discussion about educational alternatives. 6p.

ABC's of School Funding. [Qualified Public Education Facility Bonds] Adobe PDF
Skinder, Karen
(U.S.Internal Revenue Service, Washington, DC , 2003)
Qualified Public Education Facility Bonds (QPEFs) are a potential funding mechanism for both charters and public schools. QPEFs are a type of exempt facility bond created under section 422 of the Economic Growth and Tax Relief Reconciliation Act of 2001. QPEFs allows state or federal agencies to enter into a public-private partnership with a for-profit organization, under which the for-profit agrees to construct, rehabilitate, refurbish or equip a public school facility. The bond proceeds are loaned to a private, for-profit corporation (developer) who owns the school facility and leases it to a public school. At the end of the lease term, ownership of the school facility is transferred to the public school for no additional consideration. This information packet includes; 1) IRS technical information on QPEFs; 2) a reprint of the Heritage Foundation report "How Public-Private Partnerships Can Facilitate Public School Construction" by Ronald Utt, and 3) IRS Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues. 30p.

Fiscally Responsible Leasing of School Buildings and Facilities
(This text is part of the larger publication: The Six Habits of Fiscally Responsible Public School Districts by the Mackinac Center for Public Policy. , Dec 2002)
This describes the leasing of school buildings, whereby districts sign contracts with private developers or other entities that own land and/or multipurpose buildings that could be used for schools. Optimally, such leases should be medium to long term, as schools would not want to move very often, and the private property owner would want to assure a return on the investment. In effect, this arrangement is a good example of a public–private partnership.

Innovative Methods to Fund Public School Construction. Adobe PDF
Rawlings, Lisa
(University of Maryland, School of Public Affairs, College Park , Oct 2002)
Describes three non-traditional methods of funding school construction: 1) construction/leaseback, where developers build schools and lease them to the school system, but retain ownership; 2) local incremental sales tax option for schools (LISTOS), where local jurisdictions levy a sales tax, with a portion of the revenue being contributed into a fund for needier jurisdictions which lack the sales base for such a program; 3) innovative partnerships, where systems join with other community or commercial interests to create learning spaces. 8p.

Instruction Guide for Lease Approval and Building Aid: Public School Districts Outside of New York City. Leased School Buildings and Facilities Located Off School Property. (Pursuant to CR 155.12). Adobe PDF
(New York State Education Dept.,Office of Facilities Planning, Albany, NY, May 2002)
State regulations allow public school districts outside of New York City to apply for Building Aid on leasing costs involving instructional facilities for grades Pre-K through 12 located off school district property. This guide explains how the districts should proceed when applying for Building Aid on leased facilities. Attached is the Regulations of the Commissioner of Education, Section 155.12: Lease Approval and Building Aid for Lease School Buildings and Facilities by Schools Districts. (GR) 15
TO ORDER: The State Education Department, University of the State of New York, Office of Facilities Planning, Room 1060, Education Building Annex, Albany, NY 12234

New Tax Law Boosts School Construction with Public-Private Partnerships. The Heritage Foundation Backgrounder No. 1463.
Utt, Ronald D.
(The Heritage Foundation, Washington, DC , Aug 2001)
This report describes a provision in a tax bill implemented in June 2001 that allows towns and cities to build public school facilities faster, better, and less expensively by forming public-private partnerships with qualified real estate investors and developers. Private sector investors can fund construction, then lease the facilities to public school systems at annual costs below the costs communities would incur if they built the schools themselves. Benefits of public-private partnerships include more timely school construction, lower costs through competition, and savings through maximum use of school facilities. Communities benefit from off-hour use of school facilities (e.g., for day care services, supplemental education programs run by private organizations, adult education programs, civic events, and religious events). Because the concept of public-private partnerships for school construction and ownership is flexible, various other innovative subcontracting arrangements could be devised to help address a community's educational and service needs (e.g., using the partnership approach to acquire state-of-the-art music facilities, to upgrade cafeteria kitchens, or to improve sports facilities). The report presents experiences with such partnerships in Canada, the United Kingdom, and the United States. It describes partnership schools as alternatives to smart growth restrictions. 10p.

Cooperative Agreements for Shared Use Facilities.
Carpenter, Jeffrey; Walston, James R.
(Rider, Bennett, Egan, & Arundel, LLP, Minneapolis, MN , 2001)
Presents a legal perspective on what a shared facility is; describes typical partners in a shared use arrangement; and identifies common locations, anticipated purposes, and funding sources. Also discussed are different organizational structures that can be established, such as joint powers entity, lease, or license; land acquisition and development issues, with matters of conveyencing, zoning, and construction; and other common legal/practical issues or dilemmas. 21p.

New Jersey State Department of Education, Administrative Code, Chapter 26: Educational Facilities. Adobe PDF
(New Jersey Department of Education, Trenton , 2001)
Lists the states rules for educational facilities. Seventeen subchapters detail requirements for long-range facilities plans, capital project review, management of capital projects, educational adequacy assessment, planning and construction standards, land acquisition, school closing, land disposal, temporary facilities, capital reserve accounts, lease and lease- purchase agreements, county vocational district rehabilitation, maintenance and operation, retroactive funding, witholding of support for non-compliance, documents, qualifications of a certified educational facilities manager, and the appeals process. 121p.

Fiscal Tracking For a New School [California]
(California Association of School Business Officials, Sacramento, CA, 2000)
This user guide was developed to assist school districts, step-by-step, through the log on and retrieval of New Construction and Modernization project information for the Lease-Purchase Program. By utilizing this service, school districts can avoid delay when inquiring for standard project standard questions. The Office of Public School Construction published the Project Tracking User Guide to assist you in understanding how to use the Project Tracking System (PTS). It will explain how to access the service, what to enter in the fields, and how to move from screen to screen. The guide includes a survey summary of costs for new schools. 180p.
TO ORDER: California Association of School Business Officials Bookstore, 700 N. 10th Street, Suite 100, Sacramento, CA 95811; Tel: 916-447-3783, Fax: 916-447-3794
http://www.casbo.org

State Requirements for Educational Facilities, 1999. [Florida]
(Florida Department of Education, Educational Facilities, Tallahassee, FL , Jul 1999)
This updated, two-volume document provides guidance for those involved in the educational facilities procurement process, and includes recent legislative changes affecting the state of Florida's building code. The first volume is organized by the sequence of steps required in the facilities procurement process and presents state requirements for property acquisition/disposal, finance, lease and lease-purchase, historic buildings, program development, professional services, inspection services, and design and inspection standards. The second volume contains Florida's Uniform Building Code. 209p.

Case Study. Downtown Partnership Elementary School. Tampa, Florida
(National Council for Public-Private Partnerships, 1999)
Hillsborough County Public School System entered into a lease with First Presbyterian Church to house a K-5th grade elementary school. Hillsborough County Public School System contracted with Easter Seals to provide pre-k instruction and before and after school care at the school. The Downtown Partnership Elementary School is an excellent example of an innovative and creative public-private partnership which addresses some critical issues facing the school district. Reusing an existing facility within walking distance of the downtown employment center has made quality education and increased parental involvement possible.

Lease-Purchase Program Applicant Handbook. Adobe PDF
(California Department of General Services, State Allocation Board , Apr 1998)
This manual guides applicants through the process of acquiring and managing California state funds for public school facility construction projects. Section 1 focuses on determining eligibility and preparing application packages for Phase P approval and/or apportionment. Section 2 examines regulations and required forms for selecting school sites, including rules for real property appraisals, site purchasing, and relocation assistance. Section 3 focuses on preparing the Estimated Project Cost Detail, Form SAB 506A; and the Summary of Estimated Costs, Form SAB 506B. Section 4 explains the meaning and components of a non-DSA approved construction plan. Section 5 covers the final design and specifications review and approval process. Section 6 explains the bid authorization process. Section 7 addresses the "change order" process for any changes or alterations during project construction. Section 8 discusses close-out audit regulations and forms for reporting project expenditures. Appendices contain explanations and qualification guidelines for satisfying specific allocation programs and district needs such as cost sharing, restricted maintenance accounts, hardship status, abandonment and/or rehabilitation policies, and environmental impact documentation. 123p.

Letter of Intent Forms.
(New York State Education Dept.,Office of Facilities Planning, Albany , 1998)
New York State school districts wishing to build, add to, or lease additional facilities have administrative forms to use as supplied by the state's Department of Education, Office of Facilities Planning. This document is a collection of Letters of Intent forms in the following categories: New Building, Addition, and Reconstruction Form; Leased Space or Discovered Building Form (and Individual Project Information Form); Manufactured Building (Relocatable/Portable) Form; and District-Wide Forms (for the same but multiple projects conducted in several districts and connects the buildings in some way). 7p.
TO ORDER: The State Education Department, University of the State of New York, Office of Facilities Planning, Room 1060, Education Building Annex, Albany, NY 12234

State School Facility Programs Overview. [California] Adobe PDF
(California State Dept. of General Services, Office of Public School Construction, Sacramento, CA , 1998)
This overview examines California's various State Allocation Board's funding programs for the construction, modernization, and maintenance of local school facilities. Funding information is provided for each program as are explanations of the school facility program construction process and the lease purchase program. The organizational chart for the Office of Public School Construction concludes the document. 7p.

A Planner's Guide to Financing Public Improvements. [California]
(California Governor's Office of Planning and Research, Sacramento, CA, Jun 1997)
A Planner's Guide describes statutory financing options available to California communities. Its primary purpose is to provide city and county planners with a general discussion of methods of public works financing that do not rely on state funds. Chapter 5 discusses new school facilities; chapter 6 covers leasing; chapter 7 describes other methods such as general obligation bonds, joint powers agreements, and pooled financing.

Urban School Construction: A Case Study of Alternative Financing Methods for St. Louis, Missouri. Adobe PDF
Fitzgibbon, James; And Others
(Educational Facilities Laboratories, New York, NY , 1971)
The authors, after discussing the St. Louis school system and its financial history, survey both traditional and innovative construction finance alternatives used across the country. The authors summarize the potential transactions between two groups: (1) a school board, the city, the State, and the Federal Government; and (2) public corporations, private developers, and money sources. The authors conclude that lease-purchasing plans suggest the most promising solutions to St. Louis' educational facilities needs. 76p.

References to Journal Articles

Funding Our Future: Creative Financing Boosts School Construction
School Construction News; May 09, 2012
Public-private partnerships (P3s) are emerging as a promising way to tap the resources needed to address schools’ capital needs. Discusses public-private partnerships that are focused on renewable energy. In a different P3 scenario, school districts issue bonds and then loan the proceeds of their efforts to private developers, who in turn build the school. Once completed, the facility is leased to the district on a long-term basis at a lesser cost than the construction itself.

Lease-leaseback Opens New Avenues for School Projects.
Quackenbush, Jeff
North Bay Business Journal ; Jun 06, 2011
Discusses lease-leaseback arrangements to allow districts flexibility as a project-delivery method, so districts can identify contractors through an RFQ, RFP or notice sent to interested companies.

The Lease Piece.
Ezarik, Melissa
University Business; v14 n2 , p40-42,44 ; Feb 2011
Describes the many good effects, especially financial, of leasing network servers, SAN storage, core switches, and edge switch equipment. Leasing over five years avoid a one-time up-front cost, and guarantees a refresh every five years. 22 points detail the decisions about leasing.

Energy Smart Schools Teach Everyone Lessons.
Appel, Margo
Learning By Design; n19 , p14,15 ; Fall 2010
Discusses creative ways to finance high-performance school construction or energy-saving improvements. These include using the district's own funds to finance small projects and then using the savings for subsequent projects, bonds, lease and lease-purchase, energy performance contracts, state programs, utility company loans, and public benefit funds.

Alternative Project Delivery, as Seen from the Quality Assurance Viewpoint. Adobe PDF
Cowan, Dick
CASH Register; v31 n4 , p10,11 ; Apr 2010
Examines the features of alternative school project delivery methods available in California, including multiple contracts, design-build, agency construction management, lease-leaseback, and construction management at-risk.

Coral Park Education Center.
Design Cost Data; v53 n3 , p30-34 ; May 2009
Profiles this multi-building campus funded by a lease-back arrangement between the developer and the local school district. Building statistics, a list of the project participants, cost details, a floor plan, and photographs are included.

Crunching the Numbers for LEED K-12 Schools.
Willson, Myron; Haxton, Bruce; Beckstead, Glen; Hjorth-Vlasic, Margareta
School Planning and Management; v47 n4 , p15,26,28,32,34,35 ; Apr 2008
Suggests a process for estimating the costs of building a new LEED-certified schools, beginning with client goals and continuing through the design and construction process. Maintaining alignment between client budget and goals is emphasized.

America's Choice High School. Adobe PDF
CASH Register; v29 n1 , p15,16 ; Jan 2008
Profiles this 500-student Sacramento high school financed by a collaborative lease-leaseback arrangement.

Teacher Perceptions of the Use of a Public-Private Partnership for School Facility Provision. [United Kingdom]
Journal of School Public Relations; v29 n1 , p74-90 ; Winter 2008
This article considers how the private finance initiative, a contract for infrastructure, affected teachers' perceptions of efficacy, job satisfaction, and morale at an urban secondary school in the United Kingdom. Qualitative data collection techniques, including unstructured observation and semistructured personal interviews, were utilized to determine teachers' perceptions. The findings indicate that two facets of the initiative were problematic for educational programming: the private corporation's control over construction design and its subsequent control over facility management. Implications of this research for lease-purchase agreements in the United States are discussed.

Go for the Green. Funding School District Solar Projects. Adobe PDF
Morgan, Kerry J.
Key Post (New Jersey Association of School Business Officials); v23 n1 , 3p. ; Oct 2007
Discusses how solar projects can be financed by: (1) negotiating a lease-purchase; (2) entering into a power purchase agreement with a solar provider; and (3)long-term financing of a school construction project through school district bonds.

Public-Private Partnerships and the School Building Industry.
Ferris, Robbie
Educational Facility Planner; v41 n4 , p27-29 ; 2007
Discusses capital lease financing of schools, highlighting systemic problems with traditional school project delivery methods, best practices of public-private partnerships, and citing North Carolina's recent legislative movements that enable and regulate capital lease financing for schools.

Too Many Kids, Not Enough Seats [Radio interview]
Babin, Janet
Marketplace: American Public Radio; Jul 31, 2006
School districts in fast-growing communities are having a hard time keeping up with the demand, so some districts are studying public-private partnerships — hiring businesses to build or lease them school buildings.

Strapped School Boards Study Rent-to-Own Approach.
Crouch, Michelle; Smolowitz, Peter
Charlotte Observer; Jul 18, 2006
North Carolina lawmakers overwhelmingly approved a change in state law that gives overcrowded school systems a new way to pay for schools. Called lease-purchase or leaseback, it allows school boards to hire private developers to build schools. The districts then lease the buildings and buy them after a set period. Backers say it would get schools built more quickly and less expensively. It also wouldn't require a public vote.

Lease-Leaseback Construction. The Sudden School.
Wolter, Jennifer Teel
Prosper Magazine; May 2006
Recognizing that drafty classrooms and crumbling ceilings don’t exactly inspire students to learn, school districts are constantly looking to upgrade or construct new facilities. But inadequate funding options and a complex construction process often leave district officials’ hands tied and therefore unable to do much better. A groundbreaking way of building schools could change all that. Known as the lease-leaseback method, the private-public partnerships bring school districts and developers together in a cooperative agreement that turns typical school construction on its head.

Magnet Schools To Be on Rent-to-Own Plan
San Diego Union Tribune; Nov 16, 2005
To control skyrocketing construction costs, the California's Vista school district will use a rent-to-own strategy to build two magnet high schools at a cost of $79 million. Vista Unified joined the growing ranks of districts pursuing creative ways of financing projects while bond money keeps coming up short.

Doing More with Less: Using Real Estate Assets to Fulfill the Institution's Mission.
Wampler, Allan; Smith, Mark
College Planning and Management; v8 n4 , p16,18,20 ; Apr 2005
Describes a business approach to management of a higher education institution's real estate holdings, with quantified goals for return that accommodate sale, leasing, and joint ventures.

Smart Partnerships Construct Smart Schools.
Broberg, Brad
On Common Ground; , p22-27 ; Winter 2005
Describes, with examples, public-private partnerships to build new schools in rapidly developing areas, particularly where the developer spends impact fees to build the school themselves. This also describes the lease/purchase approach taken by the The Houston Independent School District.

Charter Schools Benefit Community Economic Development.
Halsband, Robin
Journal of Housing and Community Development; , p33-38 ; Nov-Dec 2003
Charter schools have proven an effective tool for urban economic development by reviving communities, providing services, and renovating older buildings. Because charter schools are not provided with a building, they are purchasing or leasing vacant, dilapidated properties and renovating them into spectacular new schools and community centers. Includes several case studies in Chicago, Washington, D.C., and Newark.

Private Capital for Public Schools.
McLaughlin, John M.; Bavin, G. William
The School Administrator; v7 n60 , p28-32 ; Aug 2003
While still in the early stages, public-private partnerships increasingly are providing a viable alternative to address the need for extensive renovation and development of public school facilities. This discusses the Natomas Unified School District in California use of a build-lease agreement, and the partnership with Honeywell to build a new school in Niagara Falls, N.Y.
TO ORDER: American Association of School Administrators, 801 N. Quincy St., Ste. 700, Arlington, VA 22203-1730; Tel: 703-875-0745; Email: magazine@aasa.org
http://www.aasa.org/SchoolAdministrator.aspx

Builder Turns Landlord in School Construction Plan.
Gonzales, Anne
Sacramento Business Journal; Jul 28, 2003
Discusses the public-private financing partnership for funding the new Inderkum High School in Natomas, California, in which the school district and a private developer entered into a “lease-leaseback agreement”. The school is part of the town center that includes a community college, joint-use public library, public park and swimming pool.

Natomas Superintendent Seizes Opportunity Thinks outside the Box.
Geiger, Philip E.
School Planning and Management; v42 n6 , p56-59 ; Jun 2003
Describes how the superintendent of Natomas Unified School District in Sacramento, California, along with three other educators and local government officials, teamed to create a joint-use campus that includes a community college, public library, and regional park. Taxpayer dollars are further stretched with the use of a "privately financed leased facilities" arrangement.

Schools and Economic Development.
Rittner-Heir, Robbin
School Planning and Management; v42 n4 , p16-20 ; Apr 2003
Discusses schools' evolving relationships with private industry and local government entities, which are providing mutually beneficial results. Examples include the community services located in West Virginia schools and the workforce development efforts of Intel in New Mexico schools.

Financing Energy Efficiency Projects. Adobe PDF
Zobler, Neil; Hatcher, Katy
Government Finance Review; , p14-18 ; Feb 2003
Introduces energy performance contracts and the corresponding benefits of using tax-exempt lease-purchase agreements as the underlying financing vehicle for energy efficiency improvements in buildings. It explains how to use the energy inefficiencies buried in current operating budgets to pay for energy-saving equipment, without having to compete with capital projects. It also presents a "cost of delay" model that quantifies the opportunity losses caused by delaying the installation of energy efficiency projects.

Financing Solutions for Fiscal Stress: Public-Private Partnerships.
Eden, Greg
Facilities Manager; v18 n5 , p69-71 ; Sep-Oct 2002
Discusses public-private partnerships in university construction, including Virginia's Public-Private Education Facilities and Infrastructure Act of 2002, and tax-exempt leasing.

Capital Financing of Schools: A Comparison of Lease Purchase Revenue Bonds and General Obligation Bonds.
Gamkhar, Shama; Koerner, Mona
Public Budgeting and Finance; v22 n2 , p21-39 ; Summer 2002
This article uses Texas as an example of the distinction between lease purchase revenue (LPR) bonds and general obligation (GO) bonds. The study shows that LPR bonds typically have a higher interest cost than GO bonds and do not have advantages over GO bonds in circumventing state restrictions on school district tax and debt authority. Voter approval requirements implicit in the state aid formulae supporting school bond repayments and the bond election requirements, however, are less stringent for LPR than GO bonds, and thus tend to be used by schools in property-poor districts.
TO ORDER: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=320695

Tax-Exempt Financing for Public Schools.
Kennedy, John
Commercial Modular Construction Magazine; Jun 2002
This article answers the following questions about leasing modular classrooms: 1)What is a tax-exempt lease?; 2)Who is and is not eligible?; 3) How cumbersome are municipal documents? 4) Who is responsible for maintenance, property taxes, insurance, and other operating expenses? 5) Why would I enter into a tax-exempt lease? 6) Should the dealer/manufacturer act as the lessor in the lease? How does this affect the lessee? 7) Can they finance modular equipment/furniture? 8) Who owns the equipment?"

The Viability of Lease Purchases as a Means for Funding School Facilities.
Bunch, Beverly S.; Smith, Tina
Journal of Education Finance; v27 n4 , p1049-66 ; Spring-Summer 2002
Examines the use of the lease purchase of school facilities in Texas; provides background on the use of lease purchases by Texas school districts; describes factors influencing the use of lease purchases and superintendents' experiences based on survey responses from 50 school districts; recommends careful evaluation of advantages and disadvantages before using this financing option.

Creating Schools Without Capital.
Kolke, Mark
The School Administrator; v58 n 5 , p22-26 ; May 2001
A shortage of capital and appropriate education facilities prompted the Edmonton (Alberta) Public Schools to explore creative solutions such as leasing retrofitted facilities to house new academic programs. Landlords generally like school districts, considering them reliable, long-term tenants for hard-to-rent larger buildings.
TO ORDER: American Association of School Administrators, 801 N. Quincy St., Ste. 700, Arlington, VA 22203-1730; Tel: 703-875-0745; Email: magazine@aasa.org
http://www.aasa.org/SchoolAdministrator.aspx

Found Money.
Kennedy, Mike
American School and University; v72 n10 , p16-18,20-21 ; Jun 2000
Discusses the alternative funding avenues school districts have used to support facility construction and improvements when tax levies and state aid are not enough. Acquiring donations, creating lease- purchase agreements, and using tax increment financing are highlighted.

Doing More With Lease.
Burdick, Barry
American School and University; v71 n10 , p50,52,54 ; Jun 1999
In an attempt to acquire electronic equipment and make it more affordable, schools are investigating leasing programs. This discusses the use of leasing programs as an equipment-acquisition tool. Why leasing is a viable option and the different types of leasing plans are discussed.

Financing Alternatives Call for Flexibility, Creativity
SEDLetter [Southwest Educational Development Laboratory]; v10 n4 ; Sep 1998
One page discussion of methods that can be used alone or in combination to fund school facilities: lease or lease-purchase plans; establishing business/community partnerships; imposing school impact fees; making bond issues more attractive to voters.

Bursting at the Seams: Financing and Planning for Rising Enrollments
McCord, Michael
School Business Affairs; v63 n6 , 20-23 ; Jun 1997
Using existing and new facilities more efficiently could accommodate increased student enrollment while producing significant savings in capital and operating costs. Ontario's Ministry of Education has identified 10 ways to increase facilities utilization, including innovative scheduling, year- round schooling, varied attendance plans, offsite learning, portables, and enlarged classes. A New York study recommends leased facilities and public-private partnerships.

Niagara Falls Project May be a Watershed in Privatization
Angelo, William.; Powers, Mary Buckner
ENR: Engineering News-Record; v238 , p9 ; May 12, 1997
Privatization is being used to help fund the building of a single, $60 million structure to replace 2 high schools in Niagara Falls, New York. The plan involves selling the 2 schools and $15 million in property to developers that will then build the new school and lease it to the city for 30 years at no cost to local taxpayers. The school and other facilities will be developed as a design-build, turnkey project with a guaranteed maximum price.

Lease/Purchase: A Viable Alternative for Financing Schools
Demers, Denise
School Business Affairs; v55 n1 , p21-27 ; Jan 1989
Lease-purchase finance is a viable alternative for school districts that cannot or do not want to employ traditional financing techniques. Outlines the advantages and disadvantages of lease-purchase financing compared to outright purchase; operating leasing, which is taxable; and traditional tax-exempt bond financing.

School Capital Leases in New Jersey
Kahn, Andrea L.
School Business Affairs; v53 n8 , p65-67 ; Aug 1987
Difficulty passing referenda to authorize school bonds necessary for important school capital purposes prompted New Jersey to enact legislation to authorize a school district to acquire a site and school building by lease purchase agreement. Advantages, disadvantages, and voter attitude are discussed.

Creative Capital Financing: Lease Purchase and Leasing Air Space (The Florida Approach)
Hill, Franklin L.
Educational Facility Planner; v21 n6 ; Nov-Dec 1983
Discusses lease purchase financing of capital construction as introduced in Florida and cites six benefits as follows: no public referendum, no increase in local tax, tax exempt bonds, design build construction, and depreciation. Also discussed is the option of a district leasing air space to assist in mitigating excessive land costs in major metropolitan locations. Lease purchase financing and the lease and sale of air space have tremendous applicability for the public sector financing of capital construction. It is suggested that qualified professional services be solicited to protect the interests of the local school board or municipality considering these approaches to capital financing.


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