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Predevelopment

Predevelopment is crucial for effective school facilities management, influencing financial viability and student performance. This document provides a detailed overview of the predevelopment process, including team building, site selection, and feasibility analysis. Key components include qualitative and quantitative evaluations, contrasting ownership and lease options, and conducting due diligence. Understanding these elements ensures that decisions made enhance the quality of educational spaces, ultimately impacting the operational efficiency and overall effectiveness of schools.

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Predevelopment

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  1. Predevelopment Suzanne Keech Corporate Managing Director, Studley, Inc. June 2010

  2. Facilities Process Overview

  3. Why Is Predevelopment So Important? • Real estate—second highest expense for schools • Financial viability—dependent on “smart” decisions • Quality of space—linked to student performance • Error/misstep—significantly impacts space quality and cost 3

  4. Thurgood Marshall Academy’s First School

  5. Blue Castle/Thurgood Marshall Academy Facilities

  6. Predevelopment Topics • The process • The team • Site selection • Qualitative and quantitative evaluation • Ownership vs. lease • Feasibility analysis • Sources and uses document • Pro forma • Due diligence

  7. The Predevelopment Process • Step 1: Build the team. • Step 2: Review and refine the educational facilities plan. • Step 3: Identify all feasible real estate alternatives. • Step 4: Evaluate each alternative.

  8. The Predevelopment Process • Step 5: Rank alternatives. • Step 6: Recommend site to Board of Directors. • Step 7: Negotiate terms and finalize documentation.

  9. The Team

  10. Selection Criteria for Team Members • Qualifications/experience on similar projects • Professionals dedicated to project • Fee structure • References

  11. Advice for Building a Successful Team • Hire based on qualifications/experience, team, references, and fee. • Outline scope of services, method of payment, and time frame for completion in each contract. • Exercise right of termination if performance is unsatisfactory.

  12. Site Selection: Qualitative Evaluation Criteria • Property’s conformance to education specifications • Location • Condition of property and physical features of site

  13. Site Selection: Qualitative Evaluation Criteria • Lease terms • Length of term • Sublease and assignment • Renewal rights • Legal and timing issues • Other risk factors

  14. Site Selection: Quantitative Evaluation Criteria • Lease or own • Economic terms—purchase price or lease rate • Budget • Operating—cost of utilities, repairs and maintenance, taxes (if applicable) • Capital—cost to improve the space, renovate the existing structure, or build a new one

  15. Ownership or Lease: Economic Terms 15

  16. Ownership: Advantages and Disadvantages 16

  17. Lease: Advantages and Disadvantages

  18. Feasibility Analysis • Process of combining the economic terms of each alternative with the economic resources of the school • Key documents • Sources and uses • Pro forma

  19. Sources and Uses

  20. Pro Forma

  21. Due Diligence • Conduct environmental survey. • Conduct title search and review. • Ensure conformance with zoning. • Identify the “unknowns” and ensure that both the risk and associated monetary obligations are accounted for in the program. 21

  22. Predevelopment: Key Take-Aways • Ensure team synergy. • “Am I responsible for that?” • Outline scope of work in every contract. • Feasibility analysis demonstrates school’s long-term economic viability. • Who created that budget anyway? • Refining and updating the budget at every stage is critical.

  23. Q & A

  24. Thurgood Marshall Academy’s Home

  25. Suzanne Keech Corporate Managing Director, Studley, Inc. P: 202-624-8504 >F: 202-624-8555 E-Mail: skeech@studley.com National Charter School Resource Center 1100 17th Street NW, Suite 500Washington, DC 20036-4632 Phone: 877-277-2744 Fax: 202-223-8939 E-Mail: charterschoolcenter@learningpt.org 25

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