March 7, 2014

York Prep to buy 43-acre campus after bond sale

A private bond sale will allow York Preparatory Academy to purchase the land on which its buildings sit on Eastview Road in Rock Hill.

York Preparatory Academy leaders will soon be able to say they own the land on which their buildings sit. The public charter school has just concluded a bond sale that will let it purchase its 43-acre campus on Eastview Road in Rock Hill from Hock RH, LLC, a North Carolina-based developer.

The bond sale was valued at $30 million and was managed by D.A. Davidson & Co., a Montana-based brokerage firm.

Unlike public schools, which raise money for buildings and land through raising local taxes, charter schools such as York Prep don’t have a local tax base, said Eric Duran, charter school public finance banker at D.A. Davidson, so instead of raising taxes, private investors provide the funding.

An agreement like this, with private investors in a public school, is a win-win for everyone, Duran said.

“What it does for (investors) is they get a stable investment,” he said.

They also don’t pay taxes on the interest from the investment, which means they’re willing to invest at lower interest rates, which helps the school, he said.

Like a fixed mortgage on a house, York Prep also has locked in its payment back on that investment for the next 30 years, he said. That means as revenue increases, the portion of school funds which have to be allocated to repayment will decrease.

Duran would not disclose who exactly purchased the bonds for the school, but he did say they included “big mutual funds that people have heard of and probably know about.”

In a statement, South Carolina Public Charter School District Superintendent Wayne Brazell said he was confident this move would benefit the students of York Prep for years to come.

“The York Prep bond sale is a landmark even in public charter schools in South Carolina and a testament to the viability and success of York Prep and other public charter schools in this state,” he said.

York Prep opened in 2010 at the former Trinity Christian School in Rock Hill. In 2012, the school moved to its current location, where the first three buildings were constructed. Last August, York Prep opened its fourth and final building.

The school, which will have kindergarten through 12th grade beginning next year, has more than 1,300 students.

According to the latest state report cards, York Prep spent $6,174 per pupil in the 2012-13 school year, more than $2,500 less than the Rock Hill school district spent per student.

The bond sale is not the only recent increase in funding York Prep has seen. The school recently received a $125,000 donation for the two media centers on campus.

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