In fall 2018 IDEA Southern Louisiana opened two new campuses in Baton Rouge, IDEA Innovation (more on that in a later post), and IDEA Bridge Academy (Bridge). The Bridge campus was financed using senior and subordinated debt to construct Phase I of two phases for what will ultimately be a K-12 campus in North Baton Rouge, and opened in 2018 serving grades K-3, and 6. For FY2021, Bridge is serving grades K-8 and enrolls just under 1,100 students, having expanded two grades per year since opening. Filling up its Phase I elementary and middle school facility this year, Bridge is ready for the second phase of its expansion into the high school grades.
In October 2020, IPS Enterprises, Inc. closed on a refinance and new money financing that will fund the $7.2MM construction of the Phase II high school facility at Bridge. IPS conducts the non-charter activities, such as real estate financing, for IDEA Public Schools’ expansion outside of Texas. Louisiana was the first state into which IDEA expanded, back in 2018. In securing this financing, Bridge is set to be able to open a new building on its North Baton Rouge campus into which the high school grades will expand beginning next year. Bridge is a Type 1 charter school authorized by the East Baton Rouge Parish School System.
There are several reasons Louisiana was IDEA’s first state for expansion. Only 1 in 6 students in Louisiana graduated “college ready” in 2017. Only one third of public school students have access to an “A” or a “B” school in Baton Rouge and New Orleans. Rates of childhood trauma in Baton Rouge and New Orleans are 2-4 times the national average, with about 38% of students witnessing domestic violence, 40% witnessing violent crimes, and 18% witnessing murder. IDEA worked closely with its partner, New Schools for Baton Rouge, which provides both financial support as well as real estate and site selection assistance with their knowledge of the Baton Rouge market, in deciding to come to Baton Rouge.
But despite these grim statistics, both Bridge and Innovation ranked in the top 10 schools in the State for growth in academic results. As new schools, absolute performance is not where it will ultimately be, given where most of these students started from upon entering Bridge or Innovation. IDEA Southern Louisiana achieved the top growth school ranking in Baton Rouge for both Math and ELA. Over 84% of Bridge’s students are African American, almost 80% qualify for FRL, and about 10% receive Special Education instruction. Bridge is making a difference in the lives of students who need it most.
That is in part why IPS’s lending partners stepped up to the plate. CIT Bank, formerly Mutual of Omaha Bank, had made the senior loan for Phase I, and increased their loan to help finance the Phase II expansion of the high school facility. BlueHub Capital, a CDFI which lends to many low-income communities across the country, brought in subordinate debt, along with their lending partner Hope Credit Union. The Charter School Growth Fund had been one of the Phase I subordinate lenders, and retained a portion of their initial loan in this financing. All told, these lenders committed $21.86 million in total financing to a school only in its third year of operation, which is really something because the revenues of Bridge are the only revenues securing the financing. Their support of, and commitment to, IDEA’s expansion in Louisiana is helping make a huge difference to the students Bridge is serving.
Buck Financial served as Financial Advisor to IPS. Hunton Andrews Kurth served as counsel to IPS. Kutak Rock served as counsel to CIT. Krokidas & Bluestein LLP served as counsel to BlueHub. Regions Bank continues its role as Custodial Bank begun with the 2017 Phase I financing. Project Management Services, Inc. of Austin, who has worked with IDEA on over 100 construction projects, is serving as Owners Representative. Congratulations to the students, families, and staff of IDEA Southern Louisiana and Bridge Academy.