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Questions Raised About Leasing Schools

Posted January 1, 2008

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— Two years after state lawmakers approved the concept of using public-private partnerships to build public schools, the first such projects are beginning to take shape.

Private developers build schools in the partnerships and lease them to school districts. Advocates say the arrangement gets schools built more quickly and cheaply than traditional methods of issuing bonds to pay for construction. But some people have questioned whether the savings truly exist.

"I believe these are the way of the future. It's a tool to reduce the total cost of ownership of buildings," said Robbie Ferris, chief executive of FirstFloor K-12 Solutions LLC, a Raleigh company that has designed an elementary school over the past two years.

Cumberland County Schools administrators could decide in the coming weeks whether to proceed with the FirstFloor K-12 Solutions design for a new school.

Ferris said leasing schools over time doesn't add to the building costs, and the energy-efficient model he is designing will cut utility bills over several decades.

"There's absolutely no doubt in my mind this will save millions of dollars," he said. "Thirty school systems across the state have expressed interest."

Charlotte-Mecklenburg County Schools are moving ahead with plans for a lease agreement on several renovation projects. School officials said the $65 million project may cost $150,000 more a year than using school bond money, but they said they might save money on inflation by having a private company get the schools built this year.

The Wake County school system is taking bids for a test public-private school that would open in 2010.

"Everywhere we have inquired about this, we've gotten more negative comments than positive comments. That really came as a surprise to me," school board member Horace Tart said.

Leasing schools is thought to be an option if bond money isn't available for school construction. But there is concern that private companies can't take advantage of lower interest rates available to schools and government.

Developers also have complained that the open process of submitting proposals to school administrators is slow and costly for them.

Tim Minton, executive vice president of the Home Builders Association of Raleigh-Wake County, said he believes the public-private partnerships have potential.

"I think the challenge is, when you're looking at private business and government, they tend to run differently," Minton said.

5 Comments

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  • jsanders Jan 2, 2008

    Public/private partnerships are just one of the ways to help defray school construction costs. More can be viewed here:
    http://www.johnlocke.org/policy_reports/display_story.html?id=60

  • fbell Jan 2, 2008

    This leasing is an option that has great potential to get schools built faster, and sometimes better. he majoority of the dormitories on many college camopuses are leased, theCanadian Government of British Columbia not only leases schools, but hospitals, and highways--works well for them. Let's give leasing a try in NC and Wake County.

    NC Viking

    NC Viking

  • whatelseisnew Jan 1, 2008

    You should be sick and tired of what the school board doesn't do. Another says people don't want change. We do want change. Unfortunately the wake county school board wants to keep the status quo, meaning ignore what the parents want and continue with their failed policies.

  • poohperson2000 Jan 1, 2008

    Way parents always oppose change. I have lived her for 12 years, and have noticed how slowoly people here adapt. It has improved, but there is a ways to go.

  • tartar1 Jan 1, 2008

    im sick and tired of these parents opposing things the school board does. if they keep on, there will be 3000 kids per school. wake parents are quick to oppose issues, but never come up with a DECENT alternative.