Adding School Choice to the Development Mix

• Developers are finding alternatives in areas with distant or low-quality schools
• Building strong education and community ties are key to successful programs
• Environmental programs can provide greater community impact, beyond school boundaries

Many school districts in the U.S. are reporting low test scores, and for real estate developers creating new communities in those jurisdictions, one answer is to look at alternative educational programs and charter schools. Three interesting examples were presented in “Bringing Education Home,” a panel at the ULI Fall Meeting in Chicago.

SweetBay in Panama City, Florida, is a 700-acre development on a former airport site which will eventually include 3,200 homes and 700,000 square feet of commercial space. Developer St. Andrews Bay Land Co, a unit of Leucadia National, recognized early on that schools would be a key part of the amenity package. The team tried for several months to give a school parcel to a nearby successful charter school but couldn’t reach terms, and then turned to Florida State University to explore alternatives. FSU was less interested in setting up its own facility, but partnered with the developer to help create a strong program. With a population base increasingly concerned about education, said vice president Bill Cunningham, “we anticipated the school being a key catalyst to the community.” Named University Academy, the school started kindergarten-3^rd grade classes last year on FSU’s campus and next year will move to the SweetBay site. With test-scores already significantly exceeding the area school system’s, University Academy touts a 100-person waiting list.

Cunningham cited key attributes behind the charter school’s success. “We reached out to the local public school system to share our objective of trying a new model for charter schools that could help elevate education and offer insights for everyone,” he said. Another important move was partnering with the well-respected FSU education program, which saw the opportunity to contribute to a new model. Finding individuals within various public and private groups to champion the effort was also critical, he said, and “having a [school] board member with a real estate background helped tremendously.”

In Memphis, Tennessee, charter schools are a linchpin to a two-pronged effort of real estate development and economic-revitalization. Power Center Community Development Corp. is leveraging the core component of quality schooling in a turnaround of disadvantaged neighborhoods. With five schools already underway, the initial success in gaining momentum, said Derwin Sisnett, Power Center’s point-person in the school effort that has evolved into Gestalt Community Schools. Now Gestalt’s CEO and board member, Sisnett detailed the interesting origins of the community revitalization, beginning with acquiring school property at very attractive basis.

Using the charter school model, Sisnett’s team opened Power Center Academy in 2008 to 125 sixth-grade students in the Hickory Hill area of Memphis, Tennessee. Nearly three years and 300 students later, Power Center Academy increased achievement scores and the neighborhood saw improvements in eliminating blight. “Finding a site where buildings were valued at $100 each sounds great,” he said, but the tear-down expense and related costs drove the real number to $1.6 million. “We were a non-profit and had no money, but with tax write-offs and cobbling together a variety of sources, it came together.” Along the way, the development team acquired adjacent land for future school needs, as well as senior housing, and the uplift centered on a strong school is creating a renewed and exciting Hickory Hill neighborhood.

Looking ahead, Sisnett said, “I look forward to a time when school districts would decide not to spend $30 million to just build an entirely new school site, but will split that up to create 5 or 6 new sites in troubled neighborhoods” which can model HickoryHill’s education-centric economic revitalization.

A third example offered a look at school-based environmental education programs that have significant impact on the greater community, and a way for the real estate industry to enhance most any school program with hands-on environmental education. In Chicago, WRD Environmental is part of a larger effort to complement school curricula in green education.

“We created WRD to get ahead of the problems in some communities, where education is key to changing lives,” said WRD’s Geoff Diegan, a former teacher with a strong education-perspective behind the real estate stories of the panelists. WRD assists a variety of companies and organizations in implementing environmental programs, and one Diegan zeroed in on was GreenCorp in Chicago, started under former Mayor Daley and continued under Mayor Emmanuel’s administration.

Environmental education in the schools include clean-up efforts and recycling programs which bring benefits throughout the community as students take their lessons into everyday life at home, he said. There’s also a benefit for students who go outside for hands-on environmental education: Diegan cited a Rocky Mountain Institute study that showed test scores are 20 percent higher in schools where students are exposed to natural daylight -- and the outdoors.