In October 2020, I wrote that IDEA Louisiana closed on a land acquisition financing for their third campus in Baton Rouge, ahead of the more complete construction financing to follow. In December 2020, the financing for the project was completed with the closing of the construction financing through Home Bank as senior lender and BlueHub Capital as subordinate lender.
The approximately $17 million project was funded with $11.2 MM in senior debt from Home Bank (who also funded the land takedown financing in October), $4.9 million in sub debt from BlueHub, and about $650K in equity provided by New Schools for Baton Rouge, an organization which provides various real estate and financing services to bring high performing charter schools to the Big Raggedy. This third campus is the next step in the roll out in Baton Rouge, as IDEA will typically seek to operate about ten schools in any market.
I’ve touched on some of this before with respect to other IDEA Louisiana projects, but the need is great in Baton Rouge, where less than 1 in 6 students graduated college ready in 2017. In addition, some difficult social circumstances regarding crime and violence either experience or witnessed by children has resulted in childhood trauma rates between 2-4 times the national average. IDEA is already making a difference, with their first two campuses showing among the fasted academic growth of in the state. Covid-19 prevented testing in 2020, but internal results would project that this trend is continuing, and is consistent with IDEA’s performance in other regions.
Buck Financial served as financial advisor to IPS Enterprises. Hunton Andrews Kurth served as counsel to IPS, and Baker Donelson served as local counsel to IDEA Louisiana. Phelps Dunbar LLP was counsel to Home Bank, and Krokidas & Bluestein LLP served as counsel to BlueHub. Congrats to the students and families of Baton Rouge. And congrats to IPS and IDEA Louisiana as you continue your expansion in Louisiana. Keep on Geauxing!