Will an Apple a Day Keep Charter Schools Away?
One of the specialty practice areas of Walter Duke + Partners is the valuation of educational facilities, particularly charter schools.
In fact, during the past five years, Walter Duke + Partners has completed over 300 valuation advisory assignments on educational facilities in the Florida market for a variety of local and national clients.
Some schools are constructed from the ground up while others are reflective of retrofitted former big box retail or warehouse buildings. Some are located in rural and suburban areas while others are situated in urban environments and feature vertical construction.
Who is the New Kid?
Charter Schools are a recent innovation in public education.
First implemented in Minnesota in 1991, charter schools are public schools holding state or local agency contracts to meet specified student achievement goals. In return, the charter school is allocated public educational funds for a stated period of time.
Charter Schools are waived from all state statutes except those involving civil rights and health, welfare and safety of students.
Charter schools are poised to become mainstream in many parts of the country.
According to a recent article in the Wall Street Journal, about 2.5 million or 5.1% of public school students were enrolled in charter schools in the 2013-2014 school year, up from 300,000 or 0.07% in 1999-2000. Nearly every major city has charters, challenging the traditional public-school model as parents increasingly send their children to these privately run but publicly funded institutions and politicians allocate more tax dollars.
In fact, charter schools appear to have bipartisan support.
The Education Department of the current administration on September 28th announced $157 million in grants to create and expand charter schools, boosting to $3 Billion the total amount it has awarded since 1995.
Tuition-free public schools
Charter schools are tuition-free public schools allowed to function with independent governing boards, created through an agreement or “charter” between the school and the local school board or a state university. This agreement gives the charter school a measure of expanded freedom relative to traditional public schools in return for a commitment to higher standards of accountability.
Florida Charter Schools
Since 1996, Florida charter schools have played a key role in increasing parental options in public education and providing innovative learning opportunities for students. The charter school movement offers more choice, alternatives to lagging public schools and more autonomy from bureaucracy to try new learning approaches.
Many charter schools in Florida have innovative missions. Some charter schools include themed learning approaches focusing on areas such as arts, sciences, and technologies. Other charter schools provide services to special populations such as students at risk of academic failure or students with disabilities.
Do the Math!
During the recently completed 2013-2014 school year, a total of 229,233 students were enrolled in 623 charter schools within Florida districts, representing 15% of the overall K-12 public student population, and ranking the state third in the nation in charter school enrollment.
Florida charter schools are now producing consistently higher student achievement rates than the state’s district public schools. A 2012 study by the Florida Department of Education compared charter school student achievement data from 2010-11 with that of district public schools.
The results reflect charter schools clearly outperformed district public schools in all measures in nearly every student subgroup and grade level.
The study compared public charter school and district public school student achievement among all grade levels and student subgroups. Public charter schools outperformed district schools in 145 out of the 168 comparisons of data, often by significant margins.
Not Everyone is Happy
Critics of charter schools often center complaints that charter schools draw more motivated families, leaving public school districts with fewer resources to educate the neediest students. Supporters argue that charters are a proven, good alternative for many children from disadvantaged families and underperforming public school districts. There are differences of opinion as well regarding the compensation and training of the teachers and faculty.
Not All is Rosey
Also, despite the success of charter schools outlined above, certain pitfalls have plagued charter schools in Florida.
Due primarily to financial reasons and mismanagement an increase in charter school closures has been noted over the last few years across the State of Florida. Private charter school operators receive public funds for every child they serve. When low enrollment or mismanagement cannot cover operating costs charter schools are forced to close.
Looking to Spend Their Lunch Money
In general, the charter school market in Florida remains in the expansion phase. Recent trends and observations serving to affect the current charter school market are summarized as follows:
- Investors are becoming increasingly more interested as they seek alternative investments. Cap rates have fallen based on new investor sales. However, the market is still relatively shallow and untested.
- There has been shake out at some schools with lesser locations, lesser buildings and/or lesser operators.
- The recently re-elected Republican governor of Florida is pro school choice and promotes and supports charter schools. A potential future Democratic candidate would likely not be as favorable toward charter schools, which represents an element of risk in this arena.
- The Florida House recently approved a proposal which would require school districts to share construction funds with charter schools.
Overall, there is growing acceptance of charter school options in Florida. Parents seem to be flocking to these newer options but they are learning that they need to be careful in their selection.
Four Decades In The Making
Walter Duke + Partners is a full service commercial real estate advisory firm who has been helping clients make the right decision in the Florida market for over 40 years.
We’re routinely ranked alongside the finest national firms and proud to help our clients, including people just like you, make highly informed critical decisions.