Former tennis champion Andre Agassi has teamed up with Canyon Capital Realty Advisors LLC to form a $500 million charter school fund.
The Canyon-Agassi Charter School Facilities Fund plans to develop more than 75 urban campuses over the next three or four years, which will have the capacity for around 40,000 students. The Los Angeles based fund is also receiving contributions from Intel Corp. and Citigroup Inc.
According to Canyon Capital, this is the first for-profit investment vehicle for building charter schools. There are currently more than 5,400 charter schools in the US which have capacity for 1.7 million children.
Bobby Turner, chairman of Canyon Capital Realty Advisers has said the current lack of facilities is the greatest impediment to further growth.
Although charter schools are open to the public they operate independently of local governments. This means they can hire and fire their own teachers and set their own goals. However these schools don’t have any taxing authority and have to rely on charity for any new constructions.
Facilities developed by the Canyon-Agassi fund will be leased to charter school operators for up to 6 years after which the schools will be able to purchase the campuses. It’s expected the income from rental and sales will provide a reasonable return to investors; however Turner declined to discuss the expected yield.
The first campus to be built by the new fund is in North Philadelphia’s Allegheny West community and will open in August, and will cost about $10 million. It will have capacity for around 500 kindergarten to fourth-grade students.
Agassi founded his first charter school, the Andre Agassi College Preparatory Academy in 2001, and has said that he sees this new for-profit investment vehicle as the best way of getting charter schools built quickly. Canyon Capital expects this new project to be the first in a series of these types of funds.