Hempstead LDC gives preliminary approval for charter school bond sale

March 05, 2019 - Long Island
Evergreen Charter School - Hempstead, NY

Hempstead, NY According to Frederick Parola, CEO of the town of Hempstead Local Development Corp. (LDC), The Agency has given preliminary approval to the sale of tax-exempt bonds that will preserve the Evergreen Charter School, which serves 500 students.

The LDC, which provides low-interest, tax-exempt bond financing to not-for-profits, educational institutions, hospitals, civic entities or charitable organizations within the town, granted a preliminary inducement to Circulo Real Property Holding Corp., an affiliate of Circulo De La Hispanidad, to sell $14.25 million in tax-exempt bonds. Circulo is the school’s landlord. The preliminary 5-0 approval was granted at a Jan. 24 LDC meeting. 

The sale is subject to further staff review and final approval. A public hearing was conducted on Feb. 11.

Proceeds from the bonds would used to refinance bonds sold in 2007 by Circlulo to build a 35,000-square-foot, two-story building at 605 Peninsula  Blvd. that now houses the Evergreen school, which offers bi-lingual education as an alternative to the struggling public school system. The bonds would be repaid by Circulo with the rent payments it receives from the school. There is no out-of-pocket expense to Town of Hempstead taxpayers.  

“This bond sale, if given final approval, will benefit hundreds of the children enrolled in  the Evergreen Charter School by allowing the school to remain in its current facility and assist the school in growing its enrollment,” said Parola.  

Environmental issues that developed during the construction of the building, completed in 2010, led to Circulo’s inability to make payments on the bonds, which were issued under the auspices of the town’s Industrial Development Agency. If the trustee of the 2007 bonds decided to foreclose on the building, Evergreen could be forced out of the building. Changes in state law now require not-for-profits to obtain aid from local development corporations.

The refinancing will provide Circlulo with a lower interest rate than it had been paying on the 2007 bonds and, as a result, Circulo will be able to sustain interest and principal payments based on the rent it receives from the school. The school’s rent, in turn, also will decrease.

Gil Bernardino, founder and executive director of Círculo, which created the Evergreen school, said the school has a waiting list with 500 prospective students. In 2017, the New York State Education Department allowed the school to increase its enrollment to 600 and add seventh- and eighth-grade classes to its kindergarten through sixth-grade structure. Evergreen, which now has 87 full-time-equivalent employees, expects to grow its staff by another 21 within three years.

Circulo de La Hispanidad is a social service organization established by Bernardino in 1980. It offers programs such as classes in computer skills to domestic violence and HIV/AIDS advocacy, at locations in Long Beach and Hempstead.

Comments

Add Comment


More from the New York Real Estate Journal