MacRo LTD Blog

The Real Estate Dilemma for Public Charter Schools

I guess one can call it “Straight Jacket Approval” in that once approved, public charter school start ups have to enter the cold cruel world of real estate.

Public-Charter-School-Straight-Jacket-for-Real-Estate-1Here’s the good news: The public charter school movement has made great strides over the last ten years.  But bad news persists.

A decade ago, a small band of very courageous citizens took advantage of a short break in the longstanding reign of democratic governors in Maryland.

It was  during the four year term of Republican Governor Bob Ehrlich that the door was opened just enough to provide public funding for alternative educational methods not found in the traditional public school curriculum.

The first group of Marylanders to take advantage of the opportunity spawned out of Frederick County.

Lead by Leslie Mansfield, the group jumped enthusiastically into the arduous process of writing a curriculum for a publicly funded Montessori school.  With the drafting of budgets, as well as all the other supporting documentation and planning needed to develop a strong business plan, this band of local believers followed the rules as laid out by the state legislation to achieve the necessary governmental approvals.

The legislation placed the final application decision in the hands of the local boards of education.

In Frederick County the establishment resisted the charter concept seeing it as a “taking” of funds away from the highly coveted public system.

Many within the system (including the Board of Education) stated that while they may have supported the idea of school choice, there was really no need for such in our county. The concept seemed much more appropriate within jurisdictions where the public systems were failing to meet the educational needs of their communities … like inner city Baltimore.

Undeterred and under the name of Monocacy Valley Montessori, the group developed a strong case to present to the Board of Education.  The significant component that was almost taken for granted was in securing a facility.

In most school jurisdictions around the nation that provide opportunities for public charter education, funding or facility provisions are put in place to allow these start ups to at least incubate somewhere.

Not so in Maryland.  As it turns out the matter of meeting the real estate needs of these organizations has in many ways become the most difficult hurdle facing the public charter school movement in Frederick County.

In the case of Monocacy Valley, after brutal opposition from the establishment, as well as the local teachers union, it was the issue of a facility that became the ultimate challenge.

With a pending charter contract from the Board of Education that provided an initial term of four years and no funding for facilities, this penniless crew faced the cold cruel world of leasing real estate from the private sector.

As a long time supporter of school choice I jumped into the fray to offer the support and expertise of MacRo, Ltd., Real Estate Services.

The challenge we faced was to first educate landlords about the unique concept of public charter education — a major feat in and of itself.

The next job was to convince those willing to listen that a band of enthusiastic citizens with no money of their own could credibly organize a school from scratch.  And despite a four year charter contract, the local board of education could revoke the commitment with good cause.

Oh, and how about asking that the landlord invest in tenant improvements so as to adapt the leasable space to county public school basic standards?

Finally the charter group needed to show the landlord that they could carve out enough money from their educational program budget to pay at best a below market rent — of course without any established credit relationships or ability to offer any personal, public or corporate guarantee.

Simple enough, right?  The current structure literally requires that a charter school find a needle in a haystack … while wearing a straight jacket.

Despite these challenges and even with an “I dare you” from the Board of Education, the Monocacy pioneers aided by MacRo, Ltd. was very fortunate to assist in locating adequate quarters.

Steadily the number of families who sought enrollment in the little school reached over twice that of the school’s student capacity.

For many of the parents it was not that they wanted their children to be educated in a Montessori environment, it was to find an alternative to the structure provided in a traditional public school.

What the Monocacy Valley pioneers proved was that while the state of Maryland and Frederick County Public Schools continued to up the ante on building state-of-the-art facilities, more and more families felt that the basics of education were getting lost in the fancy new buildings.

Fast forward to today.

The public acceptance of public charter education has grown, and many applications for other charters have come forth.

Over the last two years two new public school applications — Carroll Creek Montessori and Frederick Classical — have been accepted with obvious reluctance by the Frederick County Board of Education.

Then it came time to face the challenges of securing real estate for a home in a commercial or institutional building.

Ten years ago there wasn’t even a zoning category for the use of a public charter school.  Over the last year both Frederick City and Frederick County have modestly broadened the scope of various zoning designations to support these ventures.  Recent state legislation has provided landlords the right to obtain property tax exemptions when leasing to charter schools.

Positive momentum, yes … but much more can be done.

Every new charter entity has asked Frederick County Public Schools to consider making some of the excess space in current or former school property available at least on a temporary basis.

The response is always a polite rejection.

What about the soon to be old Lincoln Elementary School or shuffle some space around in the severely under capacity Thomas Johnson Middle School?

Again, a very polite negative response.

In the case of the Frederick Classical Charter School, a landlord stepped forward offering a sweetheart leasing opportunity without seeking tenant guarantees that rent would have to be paid — quite unheard of, actually. The only request:  the Board of Education provide an extension of the initial charter to eight years in order to make the lease payments affordable.

Shamefully, the members of the Board of Education could not find it within themselves to allow this request to be voted on in a public setting.  This comes only weeks after they gave the school congratulatory public approval for the site as a location, but tightened the straps of the straight jacket by remaining silent on the lease terms.

Knowing the school will be homeless without an acceptable lease, newly Board President Angie Fish just last week refused to place the matter on the public agenda for the January 25th meeting.

Besides how would it look politically for a board to approve a site one day in public and then weeks later publicly reject a nonrecourse lease for the same location without any real justification?

With that stated the real estate options remain minimal for these schools, but with perseverance their needs will be met … and they will!

The best hope for significant progress in Frederick County’s public charter school movement is to look toward the November 2012 elections.  Voters should place their sights on electing three new pro-charter candidates to weed out the old guard anti-charter mentality.

The time is now to put focus on this issue.

Become a MacRo Insider

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes for

Leave a Reply

Your email address will not be published. Required fields are marked *