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Welcome to Charter School Insider, lessons from the nation's top charter school operators, the only podcast dedicated to the behind-the-scenes business of running a successful charter school.
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Join us as we sit down with charter school leaders who share how they are overcoming the biggest operational hurdles facing their schools today. John, welcome to the show. Good to see you. Hey, good to see you too.
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I am excited for my own personal education here 'cause I, I know very little about the world that is facilities, and it's, it's a complex world as an outsider.
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And so I'm excited to learn from you today, and appreciate you coming on the show. Why don't we start with a bit about your background?
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Give us the spark notes on how you ended up in the, the niche world of charter school real estate. Yeah. Well, first, thanks for having me on. I'm excited for this conversation, and it's a good question.
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Yeah, I started out, uh, in the private sector in management consulting.
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Went back to get my master's, and coming out of that, I actually had a friend who had just started at a charter organization called Green Dot Public Schools, which some of your listeners are familiar with out here on the West Coast, and they had just launched their second school, but were dealing with a facilities challenge right off the bat.
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And so he reached out to me and said, "Hey, you know, we've got this position. We're looking for someone to come in, smart, ambitious, to help us figure out the real estate side of things for our growth trajectory."
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And so I took a leap of faith. I went in, I interviewed with them, and they just blew me away with their passion and their mission to transform education in Los Angeles, and I said, "Sign me up."
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And so since that day, which is, uh, pretty much twenty years ago, I learned on the fly, and in the midst of it, the facilities challenge that, that faced charter schools.
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And so when we started, there was, like I said, there was two schools when I joined. When I left, there was nineteen schools in the five plus years that I was there, and so we saw a tremendous amount of growth.
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But as you can imagine, a tremendous amount of facilities challenges. And so that's really where I learned how to kind of navigate all that. Okay. Fantastic.
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So you, you really cut your teeth, had the, the front lines experience coming from management consulting right into trying to figure out how to scale a charter network, and I would imagine lots of learning through doing it, it sounds like.
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So you're currently the CEO of Blueprint. Tell us a little bit about Blueprint for those who aren't familiar. My guess is a lot of people are, but you all also did a recent rebrand.
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So just give us the, the quick overview on Blueprint, and then I wanna go back to sort of where you started. Sure, yeah. Folks may be more familiar with our former name, Pacific Charter School Development, or PCSD.
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But you're right, we did recently rebrand to Blueprint. And yeah, we're a facilities-- a nonprofit facility solution provider.
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We've been around for twenty years, and really our mission is to try to dismantle barriers to access to quality education in all the markets that we work in, and we do that by facilities development.
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We have sort of three pillars that we, we, we have that we work with to support schools.
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You know, one of them is providing sort of the technical expertise and shoulder to lean on for schools, uh, kind of starting out in the real estate process. The other is access to low-cost capital.
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And the third is the nuts and bolts, which is real estate know-how, project management 101, being able to kind of guide a school in a project from its inception all the way to, to occupancy. Okay.
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Well, I'm excited to get into each of those a bit more.
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Before we do that, I wanna ask an overarching question because you mentioned private sector management consulting, then you were with Green Dot, part of that growth trajectory, and now you support schools in all sorts of scenarios, presumably with Blueprint.
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How would you say your experience, maybe even going all the way back to management consulting, how do you feel like that shapes the way you approach this work in general?
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Like when you sit down with, let's just call it a school founder who's looking to acquire their first facility, how do you feel like your background and experience kind of shape that, that perspective?
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So yeah, when we engage with a school, especially a, a, an early stage school, we really wanna try to define the parameters by which we can achieve success and really bound then the process, you know, within those, those constraints.
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And so we really start from a place of affordability, and obviously balanced with the need from the particular school. So they have their dreams and ambitions of their permanent home.
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They've got all these features that they would ideally like, whether it be, you know, flexible classroom space, outdoor space, learning labs, a community garden, et cetera.
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And we need to balance that with the realities of affordability, which is, uh, ideally based on the per pupil revenue that they receive from their, from the state, and being able to manage and be able to effectively stabilize their school and be able to afford, you know, to pay teachers, all the programmatic needs, et cetera.
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And so that's really where we start from our approach. And then from there, I always tell people it's also about sort of momentum and really just sort of getting off the ground, right?
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A lot of folks are getting stuck in first gear because it is a daunting task to enter the real estate market, right? It's risky. It's super aggress- hyper-aggressive. There are a lot of players in the marketplace.
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And so being able to navigate that is a daunting task for the average sort of school leader.
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At the same time, there needs to be sort of this leap of faith at some point to say, "Hey, look, now that we understand the realistic boundaries, let's actually jump in, take that leap.
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Let's actually start looking for sites. Let's get your board on board. Let's get your community on board.
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Let's get the excitement around kind of the prospects so that we can actually get that momentum so folks can actually start focusing on, on solving the problems."
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You mentioned the space itself, like people can get stuck in first gear. I, as an outsider looking in, uh, totally understand why.
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I, I go to a lot of charter school conferences, and I'll sit in a facilities session, and oftentimes find myself lost halfway through.
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Let's spend a little time here and unpack some of the typical challenges before we get to building momentum like you talked about. From your lens, why do you think facilities financing, facilities development is...
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Let's just start with, like, why is it such a critical component to long-term school success? Let's start there. Well, I mean, the obvious one is that everyone wants a stable home, right? Yeah.
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[laughs] To, to be able to house and start and house their school.
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Uh, and like I said earlier, I think people have ambitions as to what that, that home looks like in terms of all the features that they- Grand visions, I'm sure. Yeah. [laughs] Sometimes very grand visions.
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And so there's a reality to that of like, what can they actually achieve and accomplish given that they are a single site school, given that they have constraints in, in terms of their budget and what they receive from the state.
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So a lot of it is actually really trying to provide clarity in terms of what their realistic options are.
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And then once you sort of define that, then it's, then it is actually like who are the actual supports and players out there that ac- can actually help you achieve success, right?
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Because as you know, when you go to a lot of these charter conferences, they're sponsored by finance companies, and they're sponsored by general contractors, and there's a happy hour with a broker.
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And so there's a lot of players out there. And so for the average leader, it's like, how do you actually find that sets of supports that will actually deliver on what you need?
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Because you may not need the long-term financing, 'cause it may not be ready to achieve that or may not be affordable for where you are.
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You also may not need that general contractor to try to go build a brand new building because that is also not realistic given where you are.
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And so you may need to have someone who's a little bit more thoughtful, uh, uh, about the approach to say, "Hey, look, maybe we need to start in a smaller facility that we can lease, we can grow into."
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And once you get stable and sort of prove yourself and get financially, uh, viable and, and show academic success, then you can transition to sort of that longer term dream and actually...
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And, and then sort of activate these other resources that are available to you. You mentioned, you know, once you get stable then you have potentially more options.
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What would you say-- Let's just go with the s- you mentioned like a single site operator or, or founder [clears throat] is working in a different set of constraints.
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Certainly, the expertise, sort of the overwhelming nature of the, the real estate space is one hurdle.
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What are some of the other typical hurdles or problems that you see single site founders, operators run into when they're really excited about starting a real estate project?
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Like what-- where is the, the points that they're getting to and then getting stuck in, in first gear, going back to that analogy? Yeah. I think, you know, real estate is actually a very tangible right goal.
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Like you can wrap your arms around what a real estate looks like 'cause you can point to that building down the road or that church on the corner and say, "Hey, look, I can actually envision my school being successful in that environment, families dropping off their kids right at that corner."
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Like it's a very tangible potential solution that people can wrap their arms around. Where they start to get stuck is it's time and resource intensive, right? As we know.
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It's like you gotta spend the, the time and have the know-how to actually find those sites, negotiate it. It's full of risk. It's full of questions.
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It's full of uncertainty, and I think that's primarily where some of these leaders start to get stuck, is that they spend a lot of their own efforts, especially early on, focused on real estate because that's a problem they feel like they can solve versus spending their time and resources on student recruitment, teacher recruitment, building a quality culture focused on the academic program.
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Like a lot of these other markers and, and strategies that actually ultimately will lead to their success.
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And then ultimately also trying to figure out, like I said, how to-- who to lean on and how to lean on them, the resources that are available to help them navigate, because there are people who have done this time and time again, right?
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This is not reinventing the wheel as far as trying to find a startup facility in most of the places where there's been charter growth. There's, there's people that have done it. There's many lessons learned.
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You know, it's a minefield, and so leveraging that experience and that wisdom I think is actually really important, uh, even at the outset to make sure like you're going about this in a, in a sort of realistic way.
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Who are the different parties that get involved in a facilities acquisition process?
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And maybe you can paint for us the picture on both sides, 'cause you mentioned there's a lot of different players on the service provider side, but there's also different players on the school side.
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Who typically should be involved in a real estate project on the school side?
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And then what are some of the options on the service provider side, recognizing that your scenario is gonna dictate who you end up working with and who might be a good fit?
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I think it might be helpful for folks like myself that are not, not experts here to kind of understand the various players on either side of the coin. Yeah.
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So obviously there's starting with the school leader, right, who kind of has the vision, uh, for their school and the vision probably for their facility.
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You generally have, you know, active boards, maybe one or two folks that actually do have real estate experience, right?
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Uh, you know, do banking, finance, real estate development or maybe a broker and so, you know, we tend to see that sometimes on, on school boards which, which are different additive.
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And then ideally you have someone on staff who can actually help the school leader with the day-to-day.
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Because once you actually start into a facilities project and make that commitment, there are a lot of day-to-day decisions like on the fly that you have to commit to, right?
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What's the, the term of the lease that we wanna negotiate with the church? What is the, you know, type of flooring that we wanna include? What is the design, the color scheme?
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Uh, what is the engagement with the city to get permits, and how can we engage the city council if we need to in order to get approval?
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Like, there are a lot of these sort of day-to-day tactical Items and issues that come up.
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But ideally, you have someone else that you can help make those decisions or at least elevate them and vet them properly from the school's perspective in addition to the school leader.
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Because like we said, the school leader has 10 different hats and has a lot of other priorities that they arguably should be more focused on than facilities.
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And so providing that, you know, buffer, providing that support internally staffed, and then with, with a board member, I think is ideal.
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And then on the flip side, these external resources, I mean, yeah, there, there's a universe of lenders, brokers, contractors.
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I think that's where an entity like ours comes in, which is, one, someone who can navigate and understand the entire process, right from start to finish, and then be able to bring in the right resource at the right time to accomplish that fit.
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So it may be time to bring in a broker. It may be time to bring in a general contractor early on because we wanna walk the building.
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It may be premature to bring that contractor in because we actually don't know if this site is actually realistic.
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We gotta go talk to the city first to make sure we sort of understand all the parameters around getting it approved. Uh, and then ultimately lending, right? And lending, it can be very complicated too.
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There's short-term lending. There's long-term lending. There's a dozen different structures and tools now.
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It's become very sophisticated in terms of charter school lending, and being able to provide that, that hand-holding and navigation to actually get to a, a realistic solution that actually is, is affordable for the school is also extremely important.
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So let's talk a little bit about that process. You mentioned it, it's become more sophisticated over time, and there's a lot of different players. I totally hear you on the, the decision fatigue side of this.
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Just as you were rattling off those decisions, I'm getting decision fatigue just thinking about that on top of all the other things you would need to be doing to run a school or plan for the opening of a school.
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We just talked about some of the reasons this is hard. When this is done well, where does the facilities process start?
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Like, where do you recommend-- Let's say a board member finds you, someone introduces you to a school founder, and they say like, "Look, John, I have no idea what I'm doing. Tell me where to start.
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Who should I be talking to? You know, should I be planning for this facility pre-authorization? Should I be collecting certain data? What's a waste of my time? What's not a waste of my time?"
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I realize that's a big question, but maybe give us a few initial thoughts on when this is done well, this is what the maybe beginning ten to thirty percent looks like.
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The people that we've seen the most success have engaged even like pre-authorization.
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So let's say you're writing your charter application to the authorizer and starting to engage folks like our organization or similar organizations out there, ed champions in the space, other support organizations out there that again have either touched facilities tangentially or directly to actually say, "Hey, what are some of the best practices?
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Like what's realistic again for a year zero school, a year one school to actually achieve and potentially commit to?" And so that's first, I think a, a, an important step.
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And then obviously once they are authorized, then be able to gauge the same set of sort of resources to then be realistic about like what's achievable.
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And that's also involves finance, and that's a critical piece of this.
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Time-- I think time and time again, we see schools unfortunately sort of get over their skis in terms of financial commitments because they have the ambition, they have the dream of their facility.
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They go out there, they start shopping from day one, which I find is actually somewhat a waste of time and resources, right?
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Them actually driving around, negotiating, lining up resources when they don't even know exactly what they can afford, what they can pull off, right?
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Especially given time, ti-time constraints with these sort of authorizing windows, right? In a lot of states, we see there's like a, a twelve-month sprint to actually get a school open.
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And so, yeah, they're, they're driving around looking at this empty big box retail or, you know, whatever this play field that the church has and this ambitions of building something new, and that's just not realistic.
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And so I definitely think the folks that are actually thoughtful upfront, pre-authorization, thinking about their finances, thinking about what actually sets them up for success in terms of the, the financial commitment are the most successful when it actually comes down to executing on a successful real estate project.
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You've used the word a few times throughout the conversation that you all encourage people to be realistic about the current space they need, about the planning process, about timelines, about where they should be spending their time.
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What are some of the leading indicators of an organization that is being realistic, that's being thoughtful in their approach? Maybe they've already done some of the things you talked about.
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They're engaging the right folks pre-authorization. What does it really mean to be realistic across some of these different facets, whether that's the project timeline or the size of your building?
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Do you all have metrics and data you're talking to people about, or is it more like, "Hey, you just need to get doors open and families signed up and kids in your building," and then you need to sort of re-underwrite everything a, a year or two in?
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How, how do you all kinda coach the folks you support around expectations? That is a very good question. I think flexibility that you sort of touched on is first and foremost.
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I think being able to have that vision, but also understanding that that might not be ultimately sort of what you can achieve, I think is important.
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I think being able to be flexible in terms of your sort of space requirements, like you said, recruitment, resources, getting off the ground successfully and what that looks like, I think involves flexibility.
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I also think, you know, leveraging community assets I think is a big one.
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I think that's something that goes, uh, sort of undeveloped in terms of being out there Meeting with community organizations, mining the, the connection points there, and being able to then surface opportunities to then collaborate, right?
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Whether it's a community center, whether it's a church, whether it's another government entity, whether it's another charter school.
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I mean, we've been successful in, in several of the places that we work in of being able to help multiple schools and/or multiple operators incubate collectively.
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And so there may be a school that's ahead of sort of the growth curve that has a building that they just opened.
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They only have two of four or five grades, and so there's space for a year or two to be able to then house a- another operator with maybe a complementary program or a complementary grade level, and then backfill that, right?
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Provide them sort of the, the full enrollment to be able to support whatever financial obligation there is.
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And then within two years, that buys us time to then build something or find something permanent for the second school and move them out while still allowing the original school to continue to grow and fulfill their enrollment pattern.
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So we've seen a lot of that, but that involves, you know, some level of coordination, which I get. You know, a lot of these folks are in their day-to-day. It's really hard at the school level to do that.
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And so I think that is actually where another value for our organization working with ed champions on the ground is to be able to actually look at a sector holistically and say, "Hey, what are all the moving parts in terms of schools trying to open and find facilities?
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Let's find ways to actually match some of them to be complementary, to be able to actually ease them into this and actually buy us all sort of the time necessary to be able to do that." Great.
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So I wanna skip ahead a little bit and talk about the funding side of this.
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And you mentioned you all sort of have three facets in which your organization supports schools and school founders, and one of those is access to affordable capital.
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Talk to us a little bit about the current landscape around how people are financing these buildings. What's changed? What's the market like right now?
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It seems like, at least as an outsider, again, I'm gonna pick on the conferences, 'cause when you go, you know, I don't know if I should talk to fill-in-the-blank bank, or should I talk to a non-- you know, one of these nonprofit sort of intermediary organizations.
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Then I hear about big philanthropy groups giving pools of money to support charter school financing options. So, like, h-how should I think about the funding landscape if I'm a school founder or leader?
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Maybe give us a framework or some thoughts on what the difference is between some of the different funding mechanisms are and your perspective on the current landscape. Yeah.
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I mean, in many ways the landscape has matured, which has been great overall for the sector, right? Like you pointed out, there are a, a good number of sort of institutional investors that are now in the market.
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There are some philanthropically backed funds that are now in the market, and a lot more sort of flexible products.
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But at the end of the day, they require a level of both sophistication and financial wherewithal to take on, right?
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And so a lot of these tools that are available are for more established schools that have either been, you know, replicating, they're part of a CMO network, and/or a school that's been established for more than three to five years, let's say, right?
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That's really the sweet spot of the market. Yeah. Proven enrollments. Yeah, yeah. A cash cushion. Yeah. Exactly. Financially sound, academically sound, right, and maybe has gone through a renewal cycle or two.
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Like, that's where the market speaks to, right? That's what the market's focused on. When they're out there and you see the shiny banner of so-and-so sponsor, like, that's what they're looking for.
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And then-- But like a lot of lenders, like, lenders will talk to you. Like, they will talk to you and, and look at, they'll look at your, your, your use case and try to solve it, but it's not a one-size-fits-all.
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And so that's where an organization like ours comes in in terms of, one, helping them navigate that.
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Two, actually providing the bridge capital to then get to that point where they can access some of these products, right? And that's an important piece of the market that's actually sort of is still a gap.
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Because frankly, let's be honest, it's, it's, it's relatively risky, right?
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You're then talking about earlier stage schools, schools that are from year zero to year three, don't have that proven track record, don't necessarily have the financial, you know, records and wherewithal to, to show, but do have sort of marks of su-- you know, potential and success.
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And so an organization like ours can step in and provide that bridge financing or whatever tool is necessary to get them off the ground, to then ideally set them up for success where they can achieve their full enrollment, where they can get that renewal, where they can get that A+ rating on their academics, right?
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And then be able to, to then go access some of these, you know, bigger, more affordable options that are out there. Right. The chi- the chicken or the egg problem. Exactly. Yeah.
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Do you feel like philanthropy-- This is-- I have no idea if this is a, uh, a polarizing question or not, or not. This is-- I'm asking out of ignorance here.
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It seems like there's been more philanthropic dollars flowing towards this problem in, call it, the last five years, maybe ten years, and you mentioned the space has matured a lot.
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I guess, like, on the positive side, I would assume that means cheaper capital and more access for schools that maybe were unlendable previously. Is that the bull case for this? And then what's the-- Is there a downside?
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Like, is there any negative side to kind of an influx of capital here? I, I'm more so just curious, like, what's the downstream impact of more attention and dollars flowing into this space, good or bad?
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And I think most people have really good intended consequences, but anytime you flood a market with something, there's, there's sort of these downstream effects that were unplanned. Yeah.
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I think you're right that it-- the sort of bull side is that there has been an influx of philanthropy acknowledging facilities, but more importantly, you know, putting their, their money behind it, right?
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Which is something that, you know, going back ten years ago Wasn't as readily, readily acknowledged in terms of, like, a priority of funding facilities.
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And I think part of it wasn't out of ignorance, I think part of it was it was just a daunting, right, task of, like, taking on facilities. Complex, uh, it varies regionally. It's obviously time and money intensive.
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It can be fairly risky. And so I think there was a level of sort of education and comfort that philanthropy had to get around in order to get there, but they are there, um, which is fantastic, and we appreciate it.
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And there's been several vehicles that have been launched in the last, you know, five to seven years that are starting to address sort of the capital side of the market, right? The access to affordability.
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I think what the downstream effects are is that there's still the missing component, like we talked about, of, one, of early stage financing, and then, two, sort of optimizing the real estate side, right, for risk, because that's still half of the equation.
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There's the money side, which they're starting to optimize in terms of these bigger capital funds, but then there's the actual nuts and bolts of real estate.
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How do you get the stuff done effectively, limit risk as much as possible, and keep things kind of on track and on budget, right? Because that's a huge, huge challenge.
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And so that to me is still where there's a lot of work to be done. And how can we better leverage philanthropy?
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Because I think what you've also seen, especially coming out of COVID with the demographic shifts, you've seen several startup schools in a lot of these, these places where there has been charter school growth be severely under enrolled, start to go down sort of this spiral, and then that, that impacts operations, that impacts academics.
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And then unfortunately, you've seen a good number of closures of schools that have opened up sort of during the pandemic, post pandemic, and philanthropy has provided them a lot of support.
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And so the conversations we're having now is like, how do we actually become more coordinated, more thoughtful, still provide them with, with the, the resources they need, but not necessarily sort of focus them solely on the, the bigger picture, you know, bigger get of like a, a brand new facility off the bat.
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That's just, again, not realistic, right, for the, for a startup school. And so let, let's work within the bounds of reality. Let's leverage philanthropy thoughtfully.
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And then, you know, our vehicle is actually to leverage philat-- not just rely on philanthropy solely, but actually leverage it with private capital. So we actually merge the two. So it's not just, "Hey,
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funder X, I'm coming to you for a million dollar grant," and that million dollar grant's just gonna be sunk in one single project and you're not gonna see it again.
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That's not a good use of philanthropy in my mind, right? I'd much rather have a million dollars go into a structure like ours. We can leverage that four or five times.
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We can spread it around multiple projects and then more importantly, make it recyclable to actually then benefit the sector over time and be evergreen. To me, that's a much more impactful use of philanthropy.
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What are some of the other drivers right now that you're seeing? We're recording this on... It's October 30th. Are there other macro drivers that you feel like are impacting projects?
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You mentioned kind of the post-COVID demographic changes, people moving, certain metros got an influx of families, other, other metros experienced the opposite.
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There's the whole sort of rate jump all the way up, and then now it's kinda steadily coming back down.
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What are some of the drivers that you all keep a close eye on that you feel like either provide wind in the sails or, or headwinds to charter school facility projects?
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Yeah, I definitely think, um, those two are the first two that we start with. So definitely demographic shifts, demand, underperforming school options that then provide demand for your option, right?
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And taking a very, very close look at that in each of the cities and s- and states that we work in is critical. Access to capital and cost of capital is definitely a big one.
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I think there has been a bull run in terms of just folks jumping into the charter school market and funding markets, but you're starting to see some pressure in terms of, again, related to sort of under enrollment and shifts.
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A lot of these schools that then got into some of these deals that then can't actually fulfill their, their, their financial commitment, right? And so you hate to see it, but that's probably gonna lead to some default.
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And then once you see default, there then starts to be downstream effects of a cooling effect on the market, more scrutiny in terms of underwriting, et cetera, et cetera. So you can start to see that.
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But again, there's a sophistication, so I don't think it's gonna be, you know, a blanket cooling effect.
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I just think there's gonna be more just stringent requirements in the underwriting process and honestly, just more focus on quality schools, which I think at the end of the day is what we're all looking for, is to support those quality schools, right?
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But I do think the benefit is that there are a number of... A diversity of like school option school models that have arisen that I think people are really excited about and think, you, you know, layer on micro schools.
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There are a lot of opportunities of academic innovation that then will actually lead to facilities innovation, where we can actually then try to find creative solutions.
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You know, again, I talked about sort of incubation and co-location as being one of them. That's a perfect example. Utilizing commercial space, right? Office space.
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We see in the paper all the time, like post-COVID, there's been, right, office space that has been freed up. We can convert that.
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There's been big box retail, small box retail that have been freed up because those businesses are no longer around or solvent. And so there are opportunities in these markets, but I just think, you know...
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And that's just the macros of real estate of like winds kinda sometimes shift quickly, but sometimes they take longer.
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And so when you see some of these opportunities like, "Oh yeah, I've seen the paper that there should be hundreds of vacant office spaces," well, a lot of those office owners are still holding onto hopes that those will be filled someday.
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So, yeah. The ship, the, the ship doesn't right itself that quickly, that suddenly you can go, you know, rent stuff on pennies on the dollar and suddenly convert them to schools.
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But we are seeing more and more of those opportunities. And then I think the last piece is district collaboration.
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That's something that I know people always aspire to have, but I do think as you start to see districts similarly struggle with enroll- under enrollment, have campuses that are underutilized, there is an opportunity to then have that conversation from a very practical perspective to then bridge it.
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And we've been actually very successful as an organization doing that. Like, I'm very proud of the work that we've done in Oakland.
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In Oakland Unified, we've done over eight projects with the school district on basically Provide utilizing their either closed or empty s- you know, excess classrooms and land to actually house a charter school.
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And it's been a very successful collaboration in a space that's traditionally not, you know, con- considered necessarily charter friendly.
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But I think that's a good example and template of where we can actually, hopefully, create more collaboration across, you know, the spectrum in, in other places.
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I'm glad you brought that up, 'cause I was gonna ask you what you see as kind of canary in the coal mine trends or things that are future trending as you look out, you know, maybe three, five years, 10 years.
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I know it's very hard to predict. You mentioned some of these burgeoning academic models. I know micro schools have gotten a lot of attention. District co-location is a great example for leveraging district assets.
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Are, are there any others you would add to that list or any other developments that you see on the horizon, whether it be on the funding side, on the actual real estate asset side or, or otherwise? I do.
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I mean, I think these sort of state level legislative changes, I think, are important, whether it's right sizing funding, right, uh, per pupil funding first and foremost, but also acknowledging facilities funding and the gap, right?
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That in a lot of places, charter schools don't have access to general obligation bonds versus, you know, a traditional district school will, right?
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And so we have seen more and more at both the district and state level acknowledgement of that, uh, inequity, and then a balancing of that to say, "Hey, we could, we should actually include charter schools who serve all students in these types of resources."
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And so there have been a lot more conversations we've seen in Colorado, for instance, Texas, and then, you know, we've historically had some access to similar pots of, of funding here in California.
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So I, I think that's sort of on the horizon in terms of really pushing legislative change in order to provide more resources specifically for charter school facilities. Awesome.
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I've got just a couple final questions, maybe some quick hits for you. If you could gather everyone who is about to embark on a facilities project into a single room, this is a wave the magic wand scenario.
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If you could bring all those folks into a single room and offer them maybe o- one to... I'll let you pick, one to three pieces of advice from your two decades of experience, what would you say?
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I'm sure it's things you'd draw on that we've already talked about, but what would be the kinda top things you would hit on if you had limited time with, with all these folks?
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You know, I have this conversation with a lot of school leaders and school boards all the time, and sort of the three things that I always hit on, one is clarity. Like, we need clarity in this process, right?
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Clarity of, like, what your intent is, what your ambitions are. Clarity on, like, what your financial wherewithal is, and clarity on, like, what we can actually realistically achieve.
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And then married to that ambition and jumping off point and making, getting that momentum off the ground, right?
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'Cause a lot of times folks have the im- the clarity, don't have that sort of being able to actually jump into it and say, like, "Let's actually go pursue this," right?
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And so I think people too often get stuck in sort of the daydreaming of trying to figure out, like, "What is our dream home? Let's go look at these five sites."
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It's just not a good use of their time, their personal time, the school leader's time. And so really bringing in a third party to be able to, like, navigate both of those I think is hugely important.
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And then, like I've been hitting on the financial piece, right?
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Making sure you understand you have a good back office provider, you know, a good internal resource who can help you navigate and manage that, because you're gonna have to make financial commitments right off the bat.
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And these are big dollars, big commitments, right, in the grand scheme of things for a charter school.
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And so not having the sophistication and wherewithal, and more importantly, the understanding of what your con- financial constraints are from day one is hugely important, and it will actually set you up for, for success.
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All right. So how can listeners learn more about Blueprint or get connected with you or your team? So you can find us at blueprintfutures.org. It's a pretty effective website.
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There's a lot of examples, uh, of the schools that we've helped deliver and support.
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We are actively in, in California, which is our home base, both Northern and Southern California, the State of Washington, Colorado, and Texas, and so we serve all of those markets.
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And so I'd encourage any schools, school leaders in those places to reach out to us and yeah, have a discussion.
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There's a general inbox there where they can reach us and we can start the dialogue in terms of figuring out how we can best support them. Okay. Awesome. Well, we'll link to that in the show notes.
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Any other resources that you find yourself recommending to others that we could link in the show notes? This could be other organizations, books, articles. Doesn't even have to be real estate related.
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We'll take any, any additional recs. I can't think of any actual readings, but, like, Charter School Growth Fund is a big partner of ours, right?
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And I know a lot of networks are, are already part of their portfolio, but I think leveraging their facilities expertise is important.
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They're very much aligned in terms of how they actually think about the facilities world and tackling the facilities challenge, and so I think that's a key one.
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I think looking at some of the use cases actually on our website are pretty helpful. Like, we try to go into some detail. We even have some videos about the process and the experience.
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And then, you know, reaching out to other school leaders who again, have walked this path in the places that they worked.
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And to me, that's where the wisdom is and that's where, you know, the lessons learned are because a lot of folks have gone through this, you know, good and bad experiences, and I think you should hear both sides, right?
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Right. 'Cause not every, not every facilities project goes to plan, and that's just the reality of it.
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Like, you have to be prepared for the 10 things that might go wrong and, and more important, like how are you gonna try to solve them and, and then achieve, kinda overcome them. Perfect place to wrap.
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John, thanks so much for coming on the show. Really appreciate it. Thanks, Danny. I really appreciate the time. [upbeat music] Thanks for listening to Charter School Insider.
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Thanks, and we hope you'll tune in for the next one.
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Welcome to Charter School Insider, lessons from the nation's top charter school operators, the only podcast dedicated to the behind-the-scenes business of running a successful charter school.
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Join us as we sit down with charter school leaders who share how they are overcoming the biggest operational hurdles facing their schools today. John, welcome to the show. Good to see you. Hey, good to see you too.
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I am excited for my own personal education here 'cause I, I know very little about the world that is facilities, and it's, it's a complex world as an outsider.
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And so I'm excited to learn from you today, and appreciate you coming on the show. Why don't we start with a bit about your background?
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Give us the spark notes on how you ended up in the, the niche world of charter school real estate. Yeah. Well, first, thanks for having me on. I'm excited for this conversation, and it's a good question.
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Yeah, I started out, uh, in the private sector in management consulting.
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Went back to get my master's, and coming out of that, I actually had a friend who had just started at a charter organization called Green Dot Public Schools, which some of your listeners are familiar with out here on the West Coast, and they had just launched their second school, but were dealing with a facilities challenge right off the bat.
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And so he reached out to me and said, "Hey, you know, we've got this position. We're looking for someone to come in, smart, ambitious, to help us figure out the real estate side of things for our growth trajectory."
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And so I took a leap of faith. I went in, I interviewed with them, and they just blew me away with their passion and their mission to transform education in Los Angeles, and I said, "Sign me up."
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And so since that day, which is, uh, pretty much twenty years ago, I learned on the fly, and in the midst of it, the facilities challenge that, that faced charter schools.
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And so when we started, there was, like I said, there was two schools when I joined. When I left, there was nineteen schools in the five plus years that I was there, and so we saw a tremendous amount of growth.
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But as you can imagine, a tremendous amount of facilities challenges. And so that's really where I learned how to kind of navigate all that. Okay. Fantastic.
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So you, you really cut your teeth, had the, the front lines experience coming from management consulting right into trying to figure out how to scale a charter network, and I would imagine lots of learning through doing it, it sounds like.
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So you're currently the CEO of Blueprint. Tell us a little bit about Blueprint for those who aren't familiar. My guess is a lot of people are, but you all also did a recent rebrand.
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So just give us the, the quick overview on Blueprint, and then I wanna go back to sort of where you started. Sure, yeah. Folks may be more familiar with our former name, Pacific Charter School Development, or PCSD.
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But you're right, we did recently rebrand to Blueprint. And yeah, we're a facilities-- a nonprofit facility solution provider.
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We've been around for twenty years, and really our mission is to try to dismantle barriers to access to quality education in all the markets that we work in, and we do that by facilities development.
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We have sort of three pillars that we, we, we have that we work with to support schools.
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You know, one of them is providing sort of the technical expertise and shoulder to lean on for schools, uh, kind of starting out in the real estate process. The other is access to low-cost capital.
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And the third is the nuts and bolts, which is real estate know-how, project management 101, being able to kind of guide a school in a project from its inception all the way to, to occupancy. Okay.
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Well, I'm excited to get into each of those a bit more.
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Before we do that, I wanna ask an overarching question because you mentioned private sector management consulting, then you were with Green Dot, part of that growth trajectory, and now you support schools in all sorts of scenarios, presumably with Blueprint.
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How would you say your experience, maybe even going all the way back to management consulting, how do you feel like that shapes the way you approach this work in general?
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Like when you sit down with, let's just call it a school founder who's looking to acquire their first facility, how do you feel like your background and experience kind of shape that, that perspective?
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So yeah, when we engage with a school, especially a, a, an early stage school, we really wanna try to define the parameters by which we can achieve success and really bound then the process, you know, within those, those constraints.
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And so we really start from a place of affordability, and obviously balanced with the need from the particular school. So they have their dreams and ambitions of their permanent home.
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They've got all these features that they would ideally like, whether it be, you know, flexible classroom space, outdoor space, learning labs, a community garden, et cetera.
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And we need to balance that with the realities of affordability, which is, uh, ideally based on the per pupil revenue that they receive from their, from the state, and being able to manage and be able to effectively stabilize their school and be able to afford, you know, to pay teachers, all the programmatic needs, et cetera.
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And so that's really where we start from our approach. And then from there, I always tell people it's also about sort of momentum and really just sort of getting off the ground, right?
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A lot of folks are getting stuck in first gear because it is a daunting task to enter the real estate market, right? It's risky. It's super aggress- hyper-aggressive. There are a lot of players in the marketplace.
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And so being able to navigate that is a daunting task for the average sort of school leader.
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At the same time, there needs to be sort of this leap of faith at some point to say, "Hey, look, now that we understand the realistic boundaries, let's actually jump in, take that leap.
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Let's actually start looking for sites. Let's get your board on board. Let's get your community on board.
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Let's get the excitement around kind of the prospects so that we can actually get that momentum so folks can actually start focusing on, on solving the problems."
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You mentioned the space itself, like people can get stuck in first gear. I, as an outsider looking in, uh, totally understand why.
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I, I go to a lot of charter school conferences, and I'll sit in a facilities session, and oftentimes find myself lost halfway through.
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Let's spend a little time here and unpack some of the typical challenges before we get to building momentum like you talked about. From your lens, why do you think facilities financing, facilities development is...
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Let's just start with, like, why is it such a critical component to long-term school success? Let's start there. Well, I mean, the obvious one is that everyone wants a stable home, right? Yeah.
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[laughs] To, to be able to house and start and house their school.
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Uh, and like I said earlier, I think people have ambitions as to what that, that home looks like in terms of all the features that they- Grand visions, I'm sure. Yeah. [laughs] Sometimes very grand visions.
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And so there's a reality to that of like, what can they actually achieve and accomplish given that they are a single site school, given that they have constraints in, in terms of their budget and what they receive from the state.
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So a lot of it is actually really trying to provide clarity in terms of what their realistic options are.
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And then once you sort of define that, then it's, then it is actually like who are the actual supports and players out there that ac- can actually help you achieve success, right?
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Because as you know, when you go to a lot of these charter conferences, they're sponsored by finance companies, and they're sponsored by general contractors, and there's a happy hour with a broker.
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And so there's a lot of players out there. And so for the average leader, it's like, how do you actually find that sets of supports that will actually deliver on what you need?
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Because you may not need the long-term financing, 'cause it may not be ready to achieve that or may not be affordable for where you are.
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You also may not need that general contractor to try to go build a brand new building because that is also not realistic given where you are.
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And so you may need to have someone who's a little bit more thoughtful, uh, uh, about the approach to say, "Hey, look, maybe we need to start in a smaller facility that we can lease, we can grow into."
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And once you get stable and sort of prove yourself and get financially, uh, viable and, and show academic success, then you can transition to sort of that longer term dream and actually...
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And, and then sort of activate these other resources that are available to you. You mentioned, you know, once you get stable then you have potentially more options.
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What would you say-- Let's just go with the s- you mentioned like a single site operator or, or founder [clears throat] is working in a different set of constraints.
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Certainly, the expertise, sort of the overwhelming nature of the, the real estate space is one hurdle.
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What are some of the other typical hurdles or problems that you see single site founders, operators run into when they're really excited about starting a real estate project?
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Like what-- where is the, the points that they're getting to and then getting stuck in, in first gear, going back to that analogy? Yeah. I think, you know, real estate is actually a very tangible right goal.
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Like you can wrap your arms around what a real estate looks like 'cause you can point to that building down the road or that church on the corner and say, "Hey, look, I can actually envision my school being successful in that environment, families dropping off their kids right at that corner."
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Like it's a very tangible potential solution that people can wrap their arms around. Where they start to get stuck is it's time and resource intensive, right? As we know.
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It's like you gotta spend the, the time and have the know-how to actually find those sites, negotiate it. It's full of risk. It's full of questions.
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It's full of uncertainty, and I think that's primarily where some of these leaders start to get stuck, is that they spend a lot of their own efforts, especially early on, focused on real estate because that's a problem they feel like they can solve versus spending their time and resources on student recruitment, teacher recruitment, building a quality culture focused on the academic program.
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Like a lot of these other markers and, and strategies that actually ultimately will lead to their success.
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And then ultimately also trying to figure out, like I said, how to-- who to lean on and how to lean on them, the resources that are available to help them navigate, because there are people who have done this time and time again, right?
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This is not reinventing the wheel as far as trying to find a startup facility in most of the places where there's been charter growth. There's, there's people that have done it. There's many lessons learned.
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You know, it's a minefield, and so leveraging that experience and that wisdom I think is actually really important, uh, even at the outset to make sure like you're going about this in a, in a sort of realistic way.
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Who are the different parties that get involved in a facilities acquisition process?
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And maybe you can paint for us the picture on both sides, 'cause you mentioned there's a lot of different players on the service provider side, but there's also different players on the school side.
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Who typically should be involved in a real estate project on the school side?
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And then what are some of the options on the service provider side, recognizing that your scenario is gonna dictate who you end up working with and who might be a good fit?
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I think it might be helpful for folks like myself that are not, not experts here to kind of understand the various players on either side of the coin. Yeah.
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So obviously there's starting with the school leader, right, who kind of has the vision, uh, for their school and the vision probably for their facility.
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You generally have, you know, active boards, maybe one or two folks that actually do have real estate experience, right?
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Uh, you know, do banking, finance, real estate development or maybe a broker and so, you know, we tend to see that sometimes on, on school boards which, which are different additive.
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And then ideally you have someone on staff who can actually help the school leader with the day-to-day.
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Because once you actually start into a facilities project and make that commitment, there are a lot of day-to-day decisions like on the fly that you have to commit to, right?
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What's the, the term of the lease that we wanna negotiate with the church? What is the, you know, type of flooring that we wanna include? What is the design, the color scheme?
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Uh, what is the engagement with the city to get permits, and how can we engage the city council if we need to in order to get approval?
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Like, there are a lot of these sort of day-to-day tactical Items and issues that come up.
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But ideally, you have someone else that you can help make those decisions or at least elevate them and vet them properly from the school's perspective in addition to the school leader.
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Because like we said, the school leader has 10 different hats and has a lot of other priorities that they arguably should be more focused on than facilities.
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And so providing that, you know, buffer, providing that support internally staffed, and then with, with a board member, I think is ideal.
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And then on the flip side, these external resources, I mean, yeah, there, there's a universe of lenders, brokers, contractors.
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I think that's where an entity like ours comes in, which is, one, someone who can navigate and understand the entire process, right from start to finish, and then be able to bring in the right resource at the right time to accomplish that fit.
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So it may be time to bring in a broker. It may be time to bring in a general contractor early on because we wanna walk the building.
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It may be premature to bring that contractor in because we actually don't know if this site is actually realistic.
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We gotta go talk to the city first to make sure we sort of understand all the parameters around getting it approved. Uh, and then ultimately lending, right? And lending, it can be very complicated too.
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There's short-term lending. There's long-term lending. There's a dozen different structures and tools now.
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It's become very sophisticated in terms of charter school lending, and being able to provide that, that hand-holding and navigation to actually get to a, a realistic solution that actually is, is affordable for the school is also extremely important.
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So let's talk a little bit about that process. You mentioned it, it's become more sophisticated over time, and there's a lot of different players. I totally hear you on the, the decision fatigue side of this.
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Just as you were rattling off those decisions, I'm getting decision fatigue just thinking about that on top of all the other things you would need to be doing to run a school or plan for the opening of a school.
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We just talked about some of the reasons this is hard. When this is done well, where does the facilities process start?
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Like, where do you recommend-- Let's say a board member finds you, someone introduces you to a school founder, and they say like, "Look, John, I have no idea what I'm doing. Tell me where to start.
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Who should I be talking to? You know, should I be planning for this facility pre-authorization? Should I be collecting certain data? What's a waste of my time? What's not a waste of my time?"
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I realize that's a big question, but maybe give us a few initial thoughts on when this is done well, this is what the maybe beginning ten to thirty percent looks like.
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The people that we've seen the most success have engaged even like pre-authorization.
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So let's say you're writing your charter application to the authorizer and starting to engage folks like our organization or similar organizations out there, ed champions in the space, other support organizations out there that again have either touched facilities tangentially or directly to actually say, "Hey, what are some of the best practices?
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Like what's realistic again for a year zero school, a year one school to actually achieve and potentially commit to?" And so that's first, I think a, a, an important step.
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And then obviously once they are authorized, then be able to gauge the same set of sort of resources to then be realistic about like what's achievable.
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And that's also involves finance, and that's a critical piece of this.
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Time-- I think time and time again, we see schools unfortunately sort of get over their skis in terms of financial commitments because they have the ambition, they have the dream of their facility.
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They go out there, they start shopping from day one, which I find is actually somewhat a waste of time and resources, right?
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Them actually driving around, negotiating, lining up resources when they don't even know exactly what they can afford, what they can pull off, right?
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Especially given time, ti-time constraints with these sort of authorizing windows, right? In a lot of states, we see there's like a, a twelve-month sprint to actually get a school open.
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And so, yeah, they're, they're driving around looking at this empty big box retail or, you know, whatever this play field that the church has and this ambitions of building something new, and that's just not realistic.
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And so I definitely think the folks that are actually thoughtful upfront, pre-authorization, thinking about their finances, thinking about what actually sets them up for success in terms of the, the financial commitment are the most successful when it actually comes down to executing on a successful real estate project.
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You've used the word a few times throughout the conversation that you all encourage people to be realistic about the current space they need, about the planning process, about timelines, about where they should be spending their time.
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What are some of the leading indicators of an organization that is being realistic, that's being thoughtful in their approach? Maybe they've already done some of the things you talked about.
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They're engaging the right folks pre-authorization. What does it really mean to be realistic across some of these different facets, whether that's the project timeline or the size of your building?
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Do you all have metrics and data you're talking to people about, or is it more like, "Hey, you just need to get doors open and families signed up and kids in your building," and then you need to sort of re-underwrite everything a, a year or two in?
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How, how do you all kinda coach the folks you support around expectations? That is a very good question. I think flexibility that you sort of touched on is first and foremost.
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I think being able to have that vision, but also understanding that that might not be ultimately sort of what you can achieve, I think is important.
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I think being able to be flexible in terms of your sort of space requirements, like you said, recruitment, resources, getting off the ground successfully and what that looks like, I think involves flexibility.
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I also think, you know, leveraging community assets I think is a big one.
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I think that's something that goes, uh, sort of undeveloped in terms of being out there Meeting with community organizations, mining the, the connection points there, and being able to then surface opportunities to then collaborate, right?
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Whether it's a community center, whether it's a church, whether it's another government entity, whether it's another charter school.
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I mean, we've been successful in, in several of the places that we work in of being able to help multiple schools and/or multiple operators incubate collectively.
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And so there may be a school that's ahead of sort of the growth curve that has a building that they just opened.
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They only have two of four or five grades, and so there's space for a year or two to be able to then house a- another operator with maybe a complementary program or a complementary grade level, and then backfill that, right?
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Provide them sort of the, the full enrollment to be able to support whatever financial obligation there is.
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And then within two years, that buys us time to then build something or find something permanent for the second school and move them out while still allowing the original school to continue to grow and fulfill their enrollment pattern.
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So we've seen a lot of that, but that involves, you know, some level of coordination, which I get. You know, a lot of these folks are in their day-to-day. It's really hard at the school level to do that.
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And so I think that is actually where another value for our organization working with ed champions on the ground is to be able to actually look at a sector holistically and say, "Hey, what are all the moving parts in terms of schools trying to open and find facilities?
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Let's find ways to actually match some of them to be complementary, to be able to actually ease them into this and actually buy us all sort of the time necessary to be able to do that." Great.
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So I wanna skip ahead a little bit and talk about the funding side of this.
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And you mentioned you all sort of have three facets in which your organization supports schools and school founders, and one of those is access to affordable capital.
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Talk to us a little bit about the current landscape around how people are financing these buildings. What's changed? What's the market like right now?
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It seems like, at least as an outsider, again, I'm gonna pick on the conferences, 'cause when you go, you know, I don't know if I should talk to fill-in-the-blank bank, or should I talk to a non-- you know, one of these nonprofit sort of intermediary organizations.
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Then I hear about big philanthropy groups giving pools of money to support charter school financing options. So, like, h-how should I think about the funding landscape if I'm a school founder or leader?
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Maybe give us a framework or some thoughts on what the difference is between some of the different funding mechanisms are and your perspective on the current landscape. Yeah.
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I mean, in many ways the landscape has matured, which has been great overall for the sector, right? Like you pointed out, there are a, a good number of sort of institutional investors that are now in the market.
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There are some philanthropically backed funds that are now in the market, and a lot more sort of flexible products.
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But at the end of the day, they require a level of both sophistication and financial wherewithal to take on, right?
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And so a lot of these tools that are available are for more established schools that have either been, you know, replicating, they're part of a CMO network, and/or a school that's been established for more than three to five years, let's say, right?
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That's really the sweet spot of the market. Yeah. Proven enrollments. Yeah, yeah. A cash cushion. Yeah. Exactly. Financially sound, academically sound, right, and maybe has gone through a renewal cycle or two.
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Like, that's where the market speaks to, right? That's what the market's focused on. When they're out there and you see the shiny banner of so-and-so sponsor, like, that's what they're looking for.
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And then-- But like a lot of lenders, like, lenders will talk to you. Like, they will talk to you and, and look at, they'll look at your, your, your use case and try to solve it, but it's not a one-size-fits-all.
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And so that's where an organization like ours comes in in terms of, one, helping them navigate that.
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Two, actually providing the bridge capital to then get to that point where they can access some of these products, right? And that's an important piece of the market that's actually sort of is still a gap.
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Because frankly, let's be honest, it's, it's, it's relatively risky, right?
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You're then talking about earlier stage schools, schools that are from year zero to year three, don't have that proven track record, don't necessarily have the financial, you know, records and wherewithal to, to show, but do have sort of marks of su-- you know, potential and success.
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And so an organization like ours can step in and provide that bridge financing or whatever tool is necessary to get them off the ground, to then ideally set them up for success where they can achieve their full enrollment, where they can get that renewal, where they can get that A+ rating on their academics, right?
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And then be able to, to then go access some of these, you know, bigger, more affordable options that are out there. Right. The chi- the chicken or the egg problem. Exactly. Yeah.
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Do you feel like philanthropy-- This is-- I have no idea if this is a, uh, a polarizing question or not, or not. This is-- I'm asking out of ignorance here.
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It seems like there's been more philanthropic dollars flowing towards this problem in, call it, the last five years, maybe ten years, and you mentioned the space has matured a lot.
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I guess, like, on the positive side, I would assume that means cheaper capital and more access for schools that maybe were unlendable previously. Is that the bull case for this? And then what's the-- Is there a downside?
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Like, is there any negative side to kind of an influx of capital here? I, I'm more so just curious, like, what's the downstream impact of more attention and dollars flowing into this space, good or bad?
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And I think most people have really good intended consequences, but anytime you flood a market with something, there's, there's sort of these downstream effects that were unplanned. Yeah.
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I think you're right that it-- the sort of bull side is that there has been an influx of philanthropy acknowledging facilities, but more importantly, you know, putting their, their money behind it, right?
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Which is something that, you know, going back ten years ago Wasn't as readily, readily acknowledged in terms of, like, a priority of funding facilities.
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And I think part of it wasn't out of ignorance, I think part of it was it was just a daunting, right, task of, like, taking on facilities. Complex, uh, it varies regionally. It's obviously time and money intensive.
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It can be fairly risky. And so I think there was a level of sort of education and comfort that philanthropy had to get around in order to get there, but they are there, um, which is fantastic, and we appreciate it.
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And there's been several vehicles that have been launched in the last, you know, five to seven years that are starting to address sort of the capital side of the market, right? The access to affordability.
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I think what the downstream effects are is that there's still the missing component, like we talked about, of, one, of early stage financing, and then, two, sort of optimizing the real estate side, right, for risk, because that's still half of the equation.
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There's the money side, which they're starting to optimize in terms of these bigger capital funds, but then there's the actual nuts and bolts of real estate.
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How do you get the stuff done effectively, limit risk as much as possible, and keep things kind of on track and on budget, right? Because that's a huge, huge challenge.
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And so that to me is still where there's a lot of work to be done. And how can we better leverage philanthropy?
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Because I think what you've also seen, especially coming out of COVID with the demographic shifts, you've seen several startup schools in a lot of these, these places where there has been charter school growth be severely under enrolled, start to go down sort of this spiral, and then that, that impacts operations, that impacts academics.
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And then unfortunately, you've seen a good number of closures of schools that have opened up sort of during the pandemic, post pandemic, and philanthropy has provided them a lot of support.
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And so the conversations we're having now is like, how do we actually become more coordinated, more thoughtful, still provide them with, with the, the resources they need, but not necessarily sort of focus them solely on the, the bigger picture, you know, bigger get of like a, a brand new facility off the bat.
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That's just, again, not realistic, right, for the, for a startup school. And so let, let's work within the bounds of reality. Let's leverage philanthropy thoughtfully.
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And then, you know, our vehicle is actually to leverage philat-- not just rely on philanthropy solely, but actually leverage it with private capital. So we actually merge the two. So it's not just, "Hey,
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funder X, I'm coming to you for a million dollar grant," and that million dollar grant's just gonna be sunk in one single project and you're not gonna see it again.
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That's not a good use of philanthropy in my mind, right? I'd much rather have a million dollars go into a structure like ours. We can leverage that four or five times.
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We can spread it around multiple projects and then more importantly, make it recyclable to actually then benefit the sector over time and be evergreen. To me, that's a much more impactful use of philanthropy.
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What are some of the other drivers right now that you're seeing? We're recording this on... It's October 30th. Are there other macro drivers that you feel like are impacting projects?
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You mentioned kind of the post-COVID demographic changes, people moving, certain metros got an influx of families, other, other metros experienced the opposite.
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There's the whole sort of rate jump all the way up, and then now it's kinda steadily coming back down.
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What are some of the drivers that you all keep a close eye on that you feel like either provide wind in the sails or, or headwinds to charter school facility projects?
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Yeah, I definitely think, um, those two are the first two that we start with. So definitely demographic shifts, demand, underperforming school options that then provide demand for your option, right?
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And taking a very, very close look at that in each of the cities and s- and states that we work in is critical. Access to capital and cost of capital is definitely a big one.
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I think there has been a bull run in terms of just folks jumping into the charter school market and funding markets, but you're starting to see some pressure in terms of, again, related to sort of under enrollment and shifts.
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A lot of these schools that then got into some of these deals that then can't actually fulfill their, their, their financial commitment, right? And so you hate to see it, but that's probably gonna lead to some default.
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And then once you see default, there then starts to be downstream effects of a cooling effect on the market, more scrutiny in terms of underwriting, et cetera, et cetera. So you can start to see that.
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But again, there's a sophistication, so I don't think it's gonna be, you know, a blanket cooling effect.
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I just think there's gonna be more just stringent requirements in the underwriting process and honestly, just more focus on quality schools, which I think at the end of the day is what we're all looking for, is to support those quality schools, right?
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But I do think the benefit is that there are a number of... A diversity of like school option school models that have arisen that I think people are really excited about and think, you, you know, layer on micro schools.
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There are a lot of opportunities of academic innovation that then will actually lead to facilities innovation, where we can actually then try to find creative solutions.
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You know, again, I talked about sort of incubation and co-location as being one of them. That's a perfect example. Utilizing commercial space, right? Office space.
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We see in the paper all the time, like post-COVID, there's been, right, office space that has been freed up. We can convert that.
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There's been big box retail, small box retail that have been freed up because those businesses are no longer around or solvent. And so there are opportunities in these markets, but I just think, you know...
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And that's just the macros of real estate of like winds kinda sometimes shift quickly, but sometimes they take longer.
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And so when you see some of these opportunities like, "Oh yeah, I've seen the paper that there should be hundreds of vacant office spaces," well, a lot of those office owners are still holding onto hopes that those will be filled someday.
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So, yeah. The ship, the, the ship doesn't right itself that quickly, that suddenly you can go, you know, rent stuff on pennies on the dollar and suddenly convert them to schools.
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But we are seeing more and more of those opportunities. And then I think the last piece is district collaboration.
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That's something that I know people always aspire to have, but I do think as you start to see districts similarly struggle with enroll- under enrollment, have campuses that are underutilized, there is an opportunity to then have that conversation from a very practical perspective to then bridge it.
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And we've been actually very successful as an organization doing that. Like, I'm very proud of the work that we've done in Oakland.
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In Oakland Unified, we've done over eight projects with the school district on basically Provide utilizing their either closed or empty s- you know, excess classrooms and land to actually house a charter school.
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And it's been a very successful collaboration in a space that's traditionally not, you know, con- considered necessarily charter friendly.
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But I think that's a good example and template of where we can actually, hopefully, create more collaboration across, you know, the spectrum in, in other places.
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I'm glad you brought that up, 'cause I was gonna ask you what you see as kind of canary in the coal mine trends or things that are future trending as you look out, you know, maybe three, five years, 10 years.
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I know it's very hard to predict. You mentioned some of these burgeoning academic models. I know micro schools have gotten a lot of attention. District co-location is a great example for leveraging district assets.
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Are, are there any others you would add to that list or any other developments that you see on the horizon, whether it be on the funding side, on the actual real estate asset side or, or otherwise? I do.
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I mean, I think these sort of state level legislative changes, I think, are important, whether it's right sizing funding, right, uh, per pupil funding first and foremost, but also acknowledging facilities funding and the gap, right?
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That in a lot of places, charter schools don't have access to general obligation bonds versus, you know, a traditional district school will, right?
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And so we have seen more and more at both the district and state level acknowledgement of that, uh, inequity, and then a balancing of that to say, "Hey, we could, we should actually include charter schools who serve all students in these types of resources."
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And so there have been a lot more conversations we've seen in Colorado, for instance, Texas, and then, you know, we've historically had some access to similar pots of, of funding here in California.
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So I, I think that's sort of on the horizon in terms of really pushing legislative change in order to provide more resources specifically for charter school facilities. Awesome.
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I've got just a couple final questions, maybe some quick hits for you. If you could gather everyone who is about to embark on a facilities project into a single room, this is a wave the magic wand scenario.
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If you could bring all those folks into a single room and offer them maybe o- one to... I'll let you pick, one to three pieces of advice from your two decades of experience, what would you say?
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I'm sure it's things you'd draw on that we've already talked about, but what would be the kinda top things you would hit on if you had limited time with, with all these folks?
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You know, I have this conversation with a lot of school leaders and school boards all the time, and sort of the three things that I always hit on, one is clarity. Like, we need clarity in this process, right?
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Clarity of, like, what your intent is, what your ambitions are. Clarity on, like, what your financial wherewithal is, and clarity on, like, what we can actually realistically achieve.
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And then married to that ambition and jumping off point and making, getting that momentum off the ground, right?
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'Cause a lot of times folks have the im- the clarity, don't have that sort of being able to actually jump into it and say, like, "Let's actually go pursue this," right?
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And so I think people too often get stuck in sort of the daydreaming of trying to figure out, like, "What is our dream home? Let's go look at these five sites."
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It's just not a good use of their time, their personal time, the school leader's time. And so really bringing in a third party to be able to, like, navigate both of those I think is hugely important.
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And then, like I've been hitting on the financial piece, right?
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Making sure you understand you have a good back office provider, you know, a good internal resource who can help you navigate and manage that, because you're gonna have to make financial commitments right off the bat.
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And these are big dollars, big commitments, right, in the grand scheme of things for a charter school.
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And so not having the sophistication and wherewithal, and more importantly, the understanding of what your con- financial constraints are from day one is hugely important, and it will actually set you up for, for success.
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All right. So how can listeners learn more about Blueprint or get connected with you or your team? So you can find us at blueprintfutures.org. It's a pretty effective website.
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There's a lot of examples, uh, of the schools that we've helped deliver and support.
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We are actively in, in California, which is our home base, both Northern and Southern California, the State of Washington, Colorado, and Texas, and so we serve all of those markets.
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And so I'd encourage any schools, school leaders in those places to reach out to us and yeah, have a discussion.
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There's a general inbox there where they can reach us and we can start the dialogue in terms of figuring out how we can best support them. Okay. Awesome. Well, we'll link to that in the show notes.
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Any other resources that you find yourself recommending to others that we could link in the show notes? This could be other organizations, books, articles. Doesn't even have to be real estate related.
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We'll take any, any additional recs. I can't think of any actual readings, but, like, Charter School Growth Fund is a big partner of ours, right?
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And I know a lot of networks are, are already part of their portfolio, but I think leveraging their facilities expertise is important.
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They're very much aligned in terms of how they actually think about the facilities world and tackling the facilities challenge, and so I think that's a key one.
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I think looking at some of the use cases actually on our website are pretty helpful. Like, we try to go into some detail. We even have some videos about the process and the experience.
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And then, you know, reaching out to other school leaders who again, have walked this path in the places that they worked.
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And to me, that's where the wisdom is and that's where, you know, the lessons learned are because a lot of folks have gone through this, you know, good and bad experiences, and I think you should hear both sides, right?
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Right. 'Cause not every, not every facilities project goes to plan, and that's just the reality of it.
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Like, you have to be prepared for the 10 things that might go wrong and, and more important, like how are you gonna try to solve them and, and then achieve, kinda overcome them. Perfect place to wrap.
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John, thanks so much for coming on the show. Really appreciate it. Thanks, Danny. I really appreciate the time. [upbeat music] Thanks for listening to Charter School Insider.
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