Sign Up For Novogradac Industry Alert Emails

Community Education Building

Developer: PS#5

Type of Development: real estate

Owner: PS#5

Cty and State: Wilmington, DE

Contact Person: Peter Svahn

Phone: 614.579.5504

Contact Email: [email protected]

Allocation Amount Requested: $30,000,000

Brief Description of Development:

Community Education BuildingWilmington, DENew Markets Tax Credit InformationSeeking $30,000,000 in NMTC AllocationApplicant/Sponsor:        Community Education Building Corp. ( CEB )                   100 West 10th St, Suite 8                   Wilmington DE 19801                   302-468-4581    www.cebde.orgContacts:    Riccardo Stoeckicht, President, 302-468-4583; [email protected]         Peter Svahn, Advisor, 508-224-7696; [email protected]  Advisors:    New Markets Counsel: George Nagle, Sorin Rand LLP, 484-362-2627       New Markets Consultant:  Noel Eisenstat, 215- 574-5890Project Name:  PS#5Need:        Education parity for low-income and underserved Wilmington            students:Students attending Wilmington, Delaware public schools that predominantly serve minority and low-income residents perform 20% below State average.  PS#5 is a unique, landmark educational initiative designed to eliminate this achievement gap for 2,400 students (approx. 20% of Wilmington K-12 students) by combining below market cost, modern facilities with quality educational experiences and comprehensive support services for four long term charter school tenants.Project Location:    1200 North French Street           Wilmington, DE, 19801Project occupies most of the block bounded by N French St, E 12th St., N Walnut St and E 13th St.  QALICB:        CEB Realty Corporation ( CEB Realty ), an established not for                profit entity, 501(c)(3) in processClosing Date:        60 days from obtaining allocation and investor term sheetProject Information:     Total Financing Required:            $31,700,000Build-out/FFE     $26,000,000Building Transfer/Value    $5,700,000Total    $31,700,000  The key elements of the project focus on improvements to convert a 450,000 sq. ft. former office building to a permanent home to 4 charter schools. 280,000 sq. ft. are dedicated to shared educational and support space and 170,000 sq. ft. parking for staff and tenants.   The project has in place a $24,000,000 7-yr. tax exempt loan and a taxable floating rate line of credit, both guaranteed by the Longwood Foundation.Kuumba Academy and Academia Antonia Alonso will be the first two school tenants.New Markets Impact:Below market, fixed, gross rents for charter school tenants:Gross rents, which include all CEB support services listed below, are projected at $17/sq. ft. using 100% debt financing. With the use of NMTC s rent will be lowered by $2/sq. ft. to $15/sq. ft. making an additional $560,000 per year or $233 per student available for additional educational and support programming, services and technology. (Gross rent includes facility management, janitorial, maintenance, utilities, technology, security and parking.)  Census Tract Information  An analysis of enrollments for Kuumba Academy for 2014/15 shows that the preponderance of enrollments will come from the following Wilmington census tracts 3000500, 0601, 0602, 0900, 1600, 1902, 2100, 2200, 2300, 2600, 2900, and 3002. Median income percentage for all but one of these tracts is < 44%.  Additional New Markets Considerations:      The CEB is located withino    The Hurricane Sandy Relief area (expires November 2014.)o    The Wilmington Downtown Improvement District, which is a special taxing district established by Ordinance under the Wilmington City Charter pursuant to State legislation, providing services to the area surrounding CEB. Paid through tax assessments made on assessable business property within the District.   The CEB has been designated by the Delaware Department of Education as the state s first non-LEA School Food Authority (SFA).  Working with a Food Service Provider, CEB will be accountable for the food programs of all tenant schools.  Excess capacity will be used to sell meals to other SFAs (several charter schools within a 2 mile radius of the facilities, a number of them located in highly distressed census tracts).   The goal is to improve the quality of meals served to as many students in the community, while reducing operating costs for client schools. 100% of Kuumba Academy s students qualify for the federal free and reduced lunch program.   Several nearby projects located in adjacent census tracts have received NMTC allocations.   In dedicating some 3,000 sq. ft. to a building health center, the CEB will partner with community-based health providers to offer services to students, complementing those traditionally available through a school nurse.  Health challenges are a known driver of absenteeism, and CEB s goal is to reduce health-related school absences enhancing the likelihood of improved student performance.   The CEB has an in-kind agreement with the Wilmington Police Department, where their motorcycle division and its leadership will be housed in the ground floor of the CEB building.  In exchange, the CEB will have parking lanes on two sides of the building designated as student pick-up and drop of areas.  CEB has also leased a gymnasium from a Youth YMCA located two blocks away for schools to conduct their PE programs, and two small lots from Elwyn Delaware (one block away) to establish a CEB garden that will be aligned with tenant school science curricula.  Economic Impact:   At capacity, charter school tenants will serve approximately 2,400 students.   Development expenditures (hard and soft): $27,600,000   Employment:o    Construction: 125-150 jobs created, Wilmington and minority workers prioritized through local job fairs;  o    Permanent building staffing:   112 classroom and other related instructional teachers   20 school administrative and support   10 building management   Numerous other third party employees for support services:a)    Health care centerb)    Food servicesc)    After School Programsd)    Other school support servicesTenant School Information:Two charter school tenants have been approved to begin occupancy for the 2014 to 2015 school year.  Additional charter tenants will be added for the 2015-16 year.Kuumba Academy: K-8, 640 StudentsKuumba Academy has received the State of Delaware Recognition Award for Closing the Achievement Gap, recognizing its academic excellence. This is the second time that Kuumba has won this award. Kuumba Academy will expand to grades K   8 and will serve 640 students. Over 80% of current Kuumba enrollment is from low income families.Academia Antonia Alonso (Academia): K-5, 600 StudentsAcademia has been chartered by the State of Delaware to open a bi-lingual (Spanish and English) charter school (K-5) using the nationally recognized Expeditionary Learning model.  Academia will serve a diverse population from the city and surrounding areas. Academia will serve grades K   5 and will serve 600 students.  It will partner with the largest Latino-social service agency in Wilmington   the Latin American Community Center for a number of student support  services.   Schools 3 & 4The third and fourth schools will be selected by the School Selection and Performance Review Committee established in partnership with CEE-Trust.  Tenant applications are entertained each spring-summer, and the CEB is currently holding its 2014 application cycle.  The Committee, composed of national education and charter school experts, reviews and recommends charter school applicants to the CEB Board of Directors to ensure that the organization s mission is upheld.  CEB Board of Directors:The CEB was established under the guidance of the Longwood Foundation as the recipient of a Bank of America donation.  Its Board of Directors represents the confluence of philanthropic, corporate and community interests working together to ensure that the organization achieves its mission and vision.

But-For Statement:

No. CEB is targeting charter school tenants (such as Kuumba Academy, CEB's first tenant), which have demonstrated ability to raise academic scores for low income students to above State average levels. To accomplish this additional resources, including both academic and other support services are necessary. By charging below market gross rents ($15/ft. instead of an estimated market facilities cost of $20/ft.), school tenants will have both additional $$$ and the ability to focus their efforts exclusively on student academic needs. All facility issues will be the responsibility of CEB.

NMTC's will allow CEB to offer below market rental rates


Learn more about Novogradac's expertise and many services