The K-8 charter school is planning to build a new 20,000-square-foot permanent building to house its elementary program. Taft Morley, finance director for American Charter Development, said the sale provides the financing ACD needed to complete the new building in time for the 2017-18 school year.
"We are the developer and will continue to be," Morley told GrowthSpotter. "We sold our ownership interest to Charter School Capital. It's an effort to help the school expand. They bought the whole project and committed funding for the next building."
American Infrastructure Funds launched Charter School Capital in 2006 to provide flexible, low-risk capital for private charter schools. In 2014, the firm established American Education Properties LLC with an initial $500 million investment.
CEO Stuart Ellis told GrowthSpotter the firm has invested $125 million in the last two years. St. Cloud Prep was the fund's 25th school acquisition.
"What they're seeking to do, their mission is to provide high quality options for the kids in that community. We're stepping into something that's already successful," he said.
The school has an 18-year lease with multiple renewal options, which provides long-term stability. "One of the things that affects whether a school is going to be successful is whether or not they have stable facilities and financial partners who are willing to support them so they can expand," Ellis said. "We're a reliable source of funding. All we do is charter schools."
Morley said ACD is in the process of selecting a design-build contractor for the new building. He declined to reveal any details about the project budget or to name the architect.
St. Cloud Prep opened in 2015 and currently serves students in grades K-8. The campus also houses a private preschool and voluntary pre-K program on site.
Principal Michele Quinn said the school is chartered for 600 elementary and middle school students plus 400 high school students. The plan is to add the high school classes one grade at a time, starting with 9th grade in 2017 after moving the elementary students into the new building.
The school had a contract to buy another 8 acres for the high school, also within the Stevens Plantation corporate campus, but that contract expired in January, according to NAI Realvest broker Veronica Malolos, listing agent for the corporate campus and retail sites.
"We tried to get an extension, but it was subject to a counter offer from the (Stevens Plantation Improvement Project Special District) and they countered at a higher asking price," Malolos said.
Quinn said the school still hopes to be able to acquire the additional land for the high school. "Eventually we'll have 1,000 students K-12," she said. "With high school comes sports and all that stuff so we need more land. We can make it work now in our space. But we have to be competitive or we won't get any students."
The school has about 550 students enrolled for the 2016-17 school year, and it's in an area of St. Cloud that's seeing high residential growth, especially along Canoe Creek Road.
"It used to be very rural," Quinn said. "Now we're surrounded by a lot of housing developments. We try to honor the history of the area. We're the only middle school in the county that has an agricultural program."
Students have built vegetable and herb gardens on campus and have even raised livestock. "We have two lambs, a bull calf, a hog, chickens and rabbits -- our students take care of them and show them at the fair," she said.
Ellis said CSC was impressed with its academic program. "The school and its leadership in the first couple of years have delivered on a promise of good education," he said. "In their first year they received A rating, and in their second year the third graders received the highest math scores in the state. We're excited to support such a successful management team."
He said CSC could also provide capital for the charter school to acquire the adjacent land and build a high school in the future. "To the extent they have a program they can create and there's demand in the community for them to add a high school, we have the capital available," he said.