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Agassi’s fund helps new charter school with building

When executives from Lighthouse Academies, a national charter school operator, sought to open a school in Milwaukee, they got approval to operate as part of the Milwaukee Public Schools family.

But the deal fizzled in 2010 when Lighthouse couldn’t reach a compromise with the district on building space, falling prey to a perennial problem for those seeking to start new charter or private schools in the city – a dearth of viable and affordable facilities.

So Lighthouse secured a K-8 charter from the City of Milwaukee and converted an old steel fabrication plant into an appropriate building with help from an unusual partner: a new national fund co-run by legendary tennis star Andre Agassi.

The new North Point Lighthouse Charter School at 4200 W. Douglas Ave. represents the second investment of the Canyon-Agassi Charter School Facilities Fund, which intends to finance buildings for 20 new charter schools across the country by next school year.

A grand opening for the school – scheduled to open this fall with about 260 kindergarten through fourth-graders – will be held Tuesday afternoon. Fund partners Agassi and Bobby Turner will be in attendance, as well as Lighthouse President and CEO Michael Ronan, Milwaukee Mayor Tom Barrett, Rep. Jason Fields (D-Milwaukee) and school staff.

And while the varied landscape of schools in Milwaukee now includes one financed in part by an eight-time Grand Slam singles tournament champion and 1996 Olympic gold medalist, Agassi prefers to talk about the state of urban education rather than his former tennis career.

“Facilities are the greatest impediment to charter school growth,” Agassi said in an interview Saturday.

Providing better educational opportunities for children nationwide drove him to help spearhead a fund that helps successful charter schools replicate and expand, he said.

‘Social investing’

The fund’s model relies on “social investing,” or raising private funds to help finance buildings for public charter schools, with a modest payoff for investors as school leaders rent and then eventually purchase the building.

“Our whole philosophy is, let’s bridge the gap to ownership,” said Turner, the chairman, CEO and co-founding partner of Canyon Capital Realty Advisors, investment management firms headquartered in Los Angeles.

“Many charter schools are not very good, and we’re all about increasing the growth of proven academic performers,” added Turner, who has helped secure sites for West Coast charter schools.

Key investors in the fund include Citibank, Intel Capital and the Kaufman Fund, he said.

Ronan said Lighthouse wanted to be in the Thurston Woods neighborhood, north of the intersection of W. Silver Spring Drive and N. 35th St., because it’s been identified as a ZIP code with few high-performing schools.

But once they identified the former steel fabrication building, they had trouble securing financing through local banks to convert it to a K-8 school, Ronan said. The plan is to eventually build a high school on the site as well.

Ronan was then introduced to Canyon-Agassi. He met with the leaders in Chicago and worked out a deal in 40 minutes, he said.

The cost to retrofit the building in time to open in 2012 would be about $5 million, and Lighthouse would pay rent each year scaled to the number of students enrolled.

For the first year, with just kindergarten through fourth-graders, that’s about $240,000 plus some operating expenses, Ronan said.

Three or four years out, the purchase price of the building will be the cost of retrofitting the facility, plus no more than a 10% markup, Ronan said.

The charter school’s income comes from an annual state payment per student of $7,775.

“It’s a unique program,” Ronan added. “Since the first time I sat down to talk with them, I thought: This is the best structure I’ve come across in 15 years of working with charter schools.”

Agassi’s lack of enthusiasm for a sport at which he was immensely talented has been well-documented – including in his 2009 biography, Open.

He said his passion lies in education, and that he was inspired by the work of KIPP, one of the country’s largest and best-known networks of so-called “no excuses” high-performing charter schools. Agassi launched the Andre Agassi Foundation for Education in 1994, and the Andre Agassi College Preparatory Academy charter school in Las Vegas in 2001.

“I had this epiphany to build a K-12 high-performing charter school, but I was very naïve,” he said.

With hundreds of kids on a waiting list, Agassi said, he started to become burdened by how hard it was to provide good schools to all who needed them. Then he got a call from Turner.

“I read your book,” he told Agassi. “I want to go over the possibility of scaling charter schools and see if you want to partner in it.”

Agassi was intrigued, and the two vetted charter management organizations and scouted locations in different cities, including Milwaukee. The fund is now about a year old, and Agassi said the money he has invested in it is personal – his kids’ college funds, he joked.

He added that tennis was never his true calling, and that he sees himself now as a facilitator who can help others operate good schools that help underprivileged students who may not be succeeding in the traditional public system.

“Doing this nationally is a platform for doing something bigger (in education) that I never thought I’d be able to pull off,” Agassi said.