Minnesota charter schools are facing growing pains

For four years, Prodeo Academy, a high-performing charter school in north Minneapolis, operated out of a church in Columbia Heights.

But as its enrollment ballooned, the school outgrew the leased church space and moved to a warehouse.

When the school opens this fall, its 600-plus students will be stretched between two campuses — in Minneapolis and St. Paul. Prodeo leaders had no luck finding a new space large enough to keep all their students under one roof.

"We thought we could fit ourselves in Minneapolis, but we couldn't find space," said Rick Campion, the school's executive director. "For a couple of years we have been looking for a permanent space, but it's been very challenging."

Prodeo's struggle mirrors the growing pains that charter schools increasingly face in Minnesota and around the country, as demand for the nontraditional public schools rises.

As an added challenge, charter school leaders say they face resistance at times from school districts that view them as competition.

A new Charter School Facilities Initiative report funded by the National Alliance for Public Charter Schools found charter schools struggle to secure affordable and adequate facilities for their students, even in district buildings with ample, underutilized space. The study stressed there are financial and practical advantages to using a district facility that's already designed for a school.

Unlike traditional public schools, charter schools by law can't buy or construct buildings. They also don't receive local property tax revenue nor can they levy for buildings. Instead, they must lease space and pay for other facility costs.

Joe Nathan, director of the St. Paul-based Center for School Change, which works with districts and charter schools, said there has been a significant increase in the number of students attending charter schools in Minneapolis and St. Paul in the last 15 years. In St. Paul, that number has more than doubled. The enrollment uptick has forced many charters to share facilities with other businesses to meet growing demand.

"The challenge of facility has been both a blessing and a curse," said Nathan, who has worked with 30 states around the issue of finding facilities for charter schools. "There's an enormous amount of creativity that has been shown, but it has been a challenge and it remains a challenge."

Currently, there are 164 charter schools serving more than 56,000 students in Minnesota. About 18 new charter schools have been approved by the state Department of Education over the next two years.

Minnesota Comeback, a coalition of nearly 50 foundation and business leaders aiming to close the achievement gap, and its partner organization Great MN Schools have been working to overcome facilities constraints faced by Minneapolis charter schools.

According to an analysis of MDE data by the group, district and charter schools in the Twin Cities have 17,000 extra seats. In Minneapolis, at least 16 schools across three sectors — district, charter and independent — are using less than 50 percent of their building capacity. All that empty space, the group says, keeps high-performing charter schools from expanding.

Underutilized school buildings don't always match school performance, the group said. But the group does suggest options such as consolidating some programs, locating some schools in the same building and housing growing schools in empty and underutilized schools.

In recent years, Comeback and Great MN Schools have spent thousands of dollars to support the expansion of high-quality charter schools. Currently, the two groups are helping three high-performing Minneapolis charters — Friendship Academy, Kipp and Prodeo Academy — find facilities, even encouraging the Minneapolis School District to lease idle space as a revenue source for the district.

Karen DeVet, the district's chief operations officer, said the district is not accepting new long-term leases or selling its vacant buildings until enrollment and programs are known. Keeping four buildings vacant, she said, is essential if classes need to be relocated.

Neither Minneapolis nor St. Paul districts is leasing space to charter schools.

To help navigate facilities constraints, long-serving charter schools have formed what's called an affiliated building company, another nonprofit corporation that could buy or construct a building on their behalf and then lease it to them. The Minnesota Association of Charter Schools is putting together a proposal for the Legislature that would allow qualified charter schools to own buildings. The proposal calls for a state revenue bond to be issued so charter schools could get lower interest rates on building projects.

"The idea is that for all the money that's going into facilities in lease payments that there would be an asset for the state and for the taxpayers," said Eugene Piccolo, the association's director.

The state of Minnesota pays up to 90 percent of $1,314 per pupil for lease cost.

In Marine on St. Croix, the Stillwater Area School District closed three elementary schools. Parents mobilized and founded River Grove. In August, the K-6 charter school opened in the Wilder Forest, a retreat center owned by the Wilder Foundation, after district officials rejected parents' request to use their vacant building.

"If we weren't lucky to have the Wilder Forest facility in the area, I don't know if getting our school up and running would be possible," the school's administrator Drew Goodson said.

Some charter school officials say they're reluctant to speak publicly about the struggle to find adequate space, fearing it may jeopardize their active lease negotiations in a competitive real estate market and could also damage an already-shaky relationship with traditional public school districts.

By working together, Nathan said, both charters and districts can offer better facilities than if they had put up buildings on their own.

"It's worthwhile to look at both the kinds of competition and collaboration that are found in colleges and universities," Nathan said. "I think public schools can do both."

Faiza Mahamud • 612-673-4203