Too many kids, not enough seats

Janet Babin Jul 31, 2006

KAI RYSSDAL: Too many kids, not enough of those tiny little chairs. That’s the math problem stumping school districts in some fast-growing communities. So some public schools are looking to the private sector to help balance the equation. From the Innovations desk at North Carolina Public Radio, Janet Babin explains.

JANET BABIN: Briar Creek Elementary is the kind of place that almost makes you wish you were back in grade school again. Brick and shiny glass exterior, spacious halls, and a room dedicated just to music class. This morning, these second graders seem eager to sing along with their teacher:

“Yea, yea, yea, we’re ready. Yea, yea, we’re ready.”

This Raleigh area school district ranks among the top in the nation. But facilities superintendent Mike Burriss says the district struggles with overcrowding:

MIKE BURRISS: We are currently at 102 percent of our capacity at the elementary schools, 24 percent of our elementary students are in mobiles or modulars.

And 7,000 new students appear each fall. To reduce the number of kids learning in double-wides, the district and the state hope to turn to the private sector. Under new state legislation, developers could build schools and then lease them back to the school district for a profit.

Similar public-private collaborations already exist in other states with fast-growing populations, like Florida, Nevada and California. Proponents say these partnerships can ease overcrowding and lower taxpayer costs.

Chris Sinclair heads a group of businesses that helped initiate the North Carolina legislation. He says local governments are less efficient builders than developers:

CHRIS SINCLAIR: It saves time. Construction materials are going up on a constant basis, and if you can get a school built quicker, and you can save millions of dollars over several years in interest.

These collaborations also appeal to districts that need new buildings but don’t have the money to build. The Philadelphia School District will lease two privately owned buildings this fall.

Philadelphia Facilities manager Len Dillinger says his district didn’t have $50 million to construct new high schools. But it does have the $1.5 million he’ll need to lease them. But he cautions school districts to think carefully before taking on a landlord:

LEN DILLINGER: Leasing a facility quite often, just as leasing an auto, will cost you more than buying one. You also are putting another middle man into the mix, and they’re not in this as a charitable type of program. They’re looking to make money as well.

Dillinger says schools and local governments can borrow money more cheaply than any private developer. So while a build-to-lease option might deliver a school faster, it won’t necessarily be cheaper in the long run.

That appears to be the case in Virginia, where the cost per square-foot of developer-built schools is slightly higher than its traditional schools. John Hill with Grimm and Parker Architects has worked on several of the Virginia deals. He says if a school project includes, say, a shopping center, or senior housing, then a developer can provide some ancillary benefit to the district. Otherwise, he says hiring a developer will cost taxpayers more money:

JOHN HILL: Their time and the profit their company intends to make has to come out of the project one way or another, and you’re adding another layer of overhead to the whole structure. It really can’t come out more cheaply than if you go directly to a school builder.

But some districts feel they can’t afford to think long-term. Schools in Charlotte recently rejected a bond issue despite overflowing classrooms. And in Raleigh voters will decide on a billion-dollar school initiative this fall. Advocates here hope these public-private partnerships will at least give cash-strapped districts an option besides the double-wide trailer classroom.

In Durham. N.C., I’m Janet Babin for Marketplace.

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