LOS ANGELES - Former tennis champion Andre Agassi and a real estate investment firm said they have teamed up to form an investment fund to finance charter school buildings in a bid to spur the growth of independent public education.
The fund, called the Canyon-Agassi Charter School Facilities Fund, plans to finance up to $750 million worth of new school construction or remodeling of buildings to accommodate schools in low-income, urban communities across the country.
"The biggest impediment is facilities," said Bobby Turner, chairman and chief executive of Los Angeles-based Canyon Capital Realty Advisors, which has partnered with Andre Agassi Ventures. "Charter organizations don't have access to public finance."
Investors in the fund include Intel Capital, Citigroup and the Ewing Marion Kauffman Foundation.
Charters are publicly funded schools, but are operated autonomously from a local school district and can't access public financing mechanisms, such as bond issues, to construct buildings.
Finding a place to put a school is typically the hardest and most expensive hurdle charter startups face.
"It is very prohibitive for many charters that have great programs," said Vielka McFarlane, founder of Celerity Educational Group, which operates four charters in low-income areas of Los Angeles and is opening three new ones in the fall. "It's the biggest challenge."
One of McFarlane's new schools will be located in a church in Compton. Other Celerity schools are housed in a converted warehouse, portable classrooms and an old parochial school.
Turner, who has worked in a similar partnership with former NBA star Earvin "Magic" Johnson to build affordable housing and commercial space in impoverished urban areas, said he contacted Agassi with a proposal to collaborate after recently reading the former tennis star's memoir.
Agassi, who operates an award-winning charter school in a poor area of Las Vegas, has long been a champion of charter school education.
Turner said the fund is designed to offer traditional investors a return on social projects that are normally associated with either public finance or philanthropy. "It's a double bottom line," said Turner, who is on the board of Pacific Charter School Development, a nonprofit developer of charter schools.
The Canyon-Agassi fund will use investors' money to build schools and lease them to charter organizations, which will later have an option to buy the buildings through low-interest, tax-exempt loans once the school becomes stabilized.
The fund aims to finance construction of 75 schools, with the first slated to open in North Philadelphia this fall. Charter organizations will be selected based on their track records of academic and financial success, Turner said.
Jed Wallace, president of the California Charter Schools Association, said the entry of private funding to boost the rapidly growing charter movement is particularly welcomed since many school districts have proven reluctant to share their campus space with charters.
Many districts see charters as rivals that siphon off students and funding, although some, such as Los Angeles Unified School District, have taken a friendlier approach and allow charters to use district facilities.